The real estate market in the UAE is expected to grow to an estimated Dh230 billion ($63 billion) in total value in about seven years, an industry figure said.
"This growth will be possible because of several regional and global factors," said Dr Mohammad Raheef Hakmi, Chairman of Armada Group.
"The chief among these factors will be the sustained uptrend in current international oil prices. This will lead to the availability of surplus funds, especially among the GCC governments," Dr Hakmi said.
These funds are mostly invested in government-sponsored development projects, including infrastructure. Real estate is one of the key areas these funds ultimately are directed toward," he said.
"Low interest rates on loans, which attracts small and large investors, is another reason behind the exploding growth of the recent IPOs [initial public offerings] both in the UAE and the region. These funds are borrowed with an eye on the higher returns, either from the booming regional stock markets or from real estate," he said.
"While banks offer much smaller returns on deposits at present, investors in real estate have reaped far higher benefits, making use of an opportunity to park their funds in this lucrative sector. This is because investors have realised real estate offers a safe return and sustained appreciation in market value in a place such as Dubai and the UAE," Dr Hakmi said.
Probably the single most important factor that triggered this growth is the flexibility in local and regional property laws and regulations that have allowed foreigners and GCC nationals to own real estate, company officials said.
Recent announcements regarding property laws vis-à-vis foreign nationals by other GCC states have only helped this trend to consolidate, company officials said.
Domestically, the projected huge growth in population here estimated to increase to 2.1 million by 2010 and the rising number of tourists visiting the UAE will trigger demand in both residential and hospitality sectors, they said.
