A thrilling win of Former US Vice President and the President-elect Joe Biden in the 2020 US Presidential elections is perceived as a panacea for the UAE economy which is currently battling with Covid-19. Banking their hopes on the next ‘World Leader’, the head honchos of the UAE property sector have announced billions of Dirhams of new construction projects. The industry looks confident of the promising growth in 2021 and in years to come.
The two biggest news of the year 2020 – Mr. Joe Biden’s win in the US Presidential elections and the approval of Covid-19 vaccines from pharmaceutical firm Pfizer will have a profound impact on the UAE real-estate sector. The glimpse of the positive impact of Biden’s win on the UAE Property market was very evident from two macro-metrics i.e. a 15% rise in the price of Brent crude and a 10% fall in the US Dollar Index from its March 2020 safe haven peak. The gurus of the UAE property sector have given their trust vote to the predictions of robust growth of the sector under Joe Biden’s presidential term between 2021 to 2024.
President-elect Biden has shown a strong commitment towards working with the World Health Organization (WHO) to prevent the infection. The development & distribution of the Covid-19 vaccine both in the US and internationally is expected to get impetus under Biden’s Presidency, which will enable the world to swiftly overcoming the after-effects of the pandemic. This is indeed a positive sign for the UAE economy as well as for its real-estate sector which has already lost billions of dollars of investment to the pandemic due to the postponement of the World Expo 2020 to next year.
Biden May Unwind China Trade War in Favor of UAE:
President-elect Joe Biden can take a strong stance on China, however, is expected to reverse most of the superfluous protectionist methods implemented by the Trump government. The top agenda of Biden’s government will focus on Intellectual Property Rights (IPR), forced transfer of technology, and a rising trade deficit of the US with China. The political pundits predict that until the US economy overcomes the catastrophic effects of Covid-19, the Biden government may unwind the China trade war in favor of a return to global growth. This will indeed be a ‘glad tiding’ for the UAE economy which relies heavily on global trade. The UAE economy will be benefited from its economic ties with both China and the US. The economy will also lead to a surge in investments in the UAE real-estate sector which will arise from policy changes under the Biden government and the approval of the Pfizer Covid-19 vaccine.
Biden’s Win Will Foster International Investments in Dubai Property Market:
US President-elect Joe Biden’s win has spur optimism in the UAE property sector with several elite investors lining up to invest in the Dubai property market. A vast majority of investments are coming from the Indian & Lebanese expats, who are buying villas at the prime locations of Dubai. According to the figures released by the Department of Land and Property in the first week of November 2020, Dubai has recorded a total of USD 789.5m (AED2.9bn) in real estate and property transactions. A total of 854 apartments and villas were sold for USD 405.66 million (AED1.49 billion) and 44 plots were sold for USD 48 million (AED176.48 million). The total number of transactions crossed 1,241 in the first week of November 2020. As per the report, the Properties developed by some of the prestigious clients of Kaizen AMS i.e. – Emirates REIT, Meraas Estates, Emaar Properties, Al Fattan, Mazaya, Tamniyat, and Constellation Holding topped the overall sales charts.
UAE Property Sector to Benefit from Weak Dollar:
Despite taking several revolutionary measures to revive the US economy from the most difficult times (such as – global financial crisis in 2008-09), the former US President – Barrack Obama and his Vice President Mr. Joe Biden has always been under fire for poorly managing the value of the US dollar in terms of other international currencies. The US Dollar witnessed its all-time low value under the leadership of Barrack Obama-Joe Biden administration. Several Wall Street and Federal Bank economists predict that until the foreseeable near future, the value of the US dollar will continue to diminish under Biden’s term as the US President.
A weak dollar will give a stimulus to international tourism in the UAE and other emerging markets, resulting in the exponential surge in the demand for accommodation. Real-estate firms will increase the construction of more residential skyscrapers, hotels, etc. to cater to the requirements of the global tourists, which will attract significant investments to the sector.
Biden’s Presidency is a New Hope to ‘Abraham Accord’ Treaty:
President-elect Joe Biden has been instrumental in stabilizing the US relations with the Middle East and Africa in his term as the Vice President of the US between 2009 to 2017. The political experts believe that Biden’s presidency will be a big boost for the ‘Abraham Accord treaty’ between Israel and the UAE which has been inching toward normalization in recent years. The treaty aimed at establishing peaceful, diplomatic, and friendly relations, co-operation, and full normalization of ties between the two nations. As a result of the Abraham Accord treaty, Israeli athletes have participated in regional competitions in the UAE which has improved the relations between the two nations. From the business perspective, the treaty has encouraged Israel to take part in Dubai’s World Expo next year which will attract billions of dollars of investment from Israel’s companies into the UAE economy with the real-estate sector expected to be one of the biggest beneficiaries. The World Expo 2020 is now scheduled to take place in October 2021 due to the coronavirus pandemic.
Biden’s government agenda revolves around every key topic which has a direct or indirect impact on the fortunes of the UAEs real-estate sector such as – climate change, renewable energy, small caps, and infrastructure. Joe’s strong commitment towards coordinating with the WHO for faster development, distribution of cost-effective vaccines for Covid-19, and strengthening ties with emerging economies, are perceived as silver lining by the UAE Property sector experts.