Thursday, December 21, 2017
During this year’s edition of Cityscape Global showcasing the evolution of the UAE's real estate market, a handful of basic trends have come up.
With a decent number of large project launches and government initiatives, Sharjah's real estate sector has evolved immensely in the present times.In fact, it has emerged as a giant in terms of a real estate investment destination. The Al Zahia project from Majid Al Futtaim and the Tilal City project have attracted investments from GCC nationals and the huge Arab population in the recent past. The evergrowing strong cultural and commercial ties between Sharjah and key Middle Eastern markets like Saudi Arabia and Egypt have made sure that such large master planned projects are accepted and acknowledged.
For a long time, Sharjah has been a preferred location for Dubai's lower paid white collar professionals, especially those living with their families.This is because it provides affordable housing and education options. According to the Dubai Statistics Centre's 2016 report, more than one million people travel from other emirates like Sharjah and Ajman to Dubai for work on a daily basis.
Thanks to the brand new project launches from private players and key initiatives from government agencies like Shurooq (Sharjah Investment and Development Authority), Sharjah has set its foot towards becoming a major business, retail and housing hub on its own.
A new entity formed earlier this year as a partnership venture between Basma Group and KBW Investments called Arada has lately announced the $6.5 billion Aljada project. This project is one of the largest real estate projects announced in the Sharjah market. It is noteworthy that this project will contain a 500,000sqm business park.Also, it is aimed at attracting large businesses to set up their operations in Sharjah.
In terms of doing business, the industry of real estate is pretty conventional, or rather old-fashioned. However, this scenario is moving towards change. Lately, Property Tech has gained momentum globally.The trend has forced itself into the consciousness of the powers-to-be in the Dubai real estate industry during Cityscape this year. The presentations on the role of technology and the disruption it will bring to the real estate industry soon were received with a mix of excitement and apprehension at the Cityscape Conference.
The Dubai government has taken a lead in adopting these new technologies as usual. There is no doubt that Dubai aspires to be one of the smartest cities in the world, especially since it launched 'The Dubai Blockchain Strategy'in December 2016. This incredible launch is a result of collaboration between Smart Dubai Office and the Dubai Future Foundation. The government’s main objective is to eliminate all paper documentation by 2020 as a part of this initiative. This implies that all physical contracts such as MoUs (memorandum of understanding) and title deeds are on their way out. Blockchain 'smart contracts' are likely to replace them. These contracts will allow real estate assets to be tokenized. This, in turn, will turn fractional ownership in real estate into reality and give way to stock market-like online exchanges for the real estate market. The message is pretty apparent - embrace technology and be part of the disruption. Else, get ready to be disrupted.
For first-time buyers who were earlier priced out of the market, entering the property market has become extremely convenient, unlike before. There are several developers who are operating in the affordable end of the market are presently offering generous payment plans requiring a minimal deposit (typically five to 10 percent) at the time of booking with the rest of the payment spread over several months (or years in some cases) after the handover. There are certain small-scale developers who are offering such aggressive payment plans.They are clearly taking significant risks. A handful of these developers will end up having to rely almost completely on bank financing to complete the projects which might not be that obtainable for the lesser known players. So, even though the entry barriers have been reduced, the buyers must do in-depth research on the developer's background prior to committing to a purchase.
Source: Khaleej Times