KHALEEJ TIMES, Sunday, Aug 30, 2020 | Muharram 11, 1442
UAE-Israel treaty will boost trade, drive real estate market
Emirates:
The peace treaty between the UAE and Israel is a game-changing initiative
and will open up new horizons that would benefit key economic sectors and
bring prosperity to the region, industry experts say.
On Saturday, the UAE scrapped an economic boycott against Israel, allowing trade
and financial agreements between the countries in another key step towards
normalising ties. The two countries are expected to hold talk this week to
promote bilateral cooperation in sectors such aviation, tourism, trade, finance,
health, energy and security.
The strategic deal, which still awaits negotiations on details such as opening
embassies, trade and travel links before it is officially signed, will benefit
the Dubai real estate sector and attract more investment from an untapped market
in the region.
Latest data from real estate consultancy ValuStrat indicated that there were
significant demand-supply imbalances during 2012-14, where Dubai had an average
of 90,000 additional residential units. However, the emirate is expected to have
less than 70,000 additional residential units during 2018-21 that will help
stabilise the market and attract huge investment from Israeli investors.
Leading developers said the landmark move will help absorb surplus inventory and
create more demand for residential units in one of the best cities offering
excellent infrastructure and life style in the region.
Atif Rahman, director and partner at Danube Properties, welcomed the peace
treaty and said it is a step in the right direction that will bring economic
stability and prosperity in the region.
"It's a big initiative and will benefit the UAE economy in general and Dubai
real estate in particular. The strategic move will help bring more investment
into the UAE economy and the property sector will be major beneficiary of it,"
he said.
The real estate sector plays a big role in the UAE's economy, primarily in
Dubai. In addition, the other emirates, notably the capital Abu Dhabi, have
shown great strides in developing their local property market in the past few
years.
As per latest data, the property sector's contribution stood at 5.4 per cent or
Dh80.2 billion of GDP at constant prices for the UAE. The sector contributed 7.4
per cent or Dh15.5 billion and 3.6 per cent or Dh28.7 billion, of GDP for Dubai
and Abu Dhabi, respectively.
Imran Farooq, chief executive officer of Samana Group of companies, said the
peace deal will have a strategic impact on region's geo-economic situation.
"It is highly expected to attract new stream of massive foreign direct
investment from a new market. The treaty has opened up new horizons for the
UAE," Farooq told Khaleej Times.
In the Middle East, the UAE's position as a financial hub should further
strengthen, he said, adding that the UAE is also expected to see a flood of new
businesses, investment and companies, which will give it a perfect recovery
before Expo in October 2021.
"Dubai's real estate will be the biggest beneficiary of the deal as the new
investor stream is expected to help absorb the surplus real estate inventory.
Also, both the UAE and Israel share their technological expertise of the sector
which will strengthen Dubai's real estate," he said.
Gary Dalton, managing director of Zoomproperty, said the recent announcement
that the UAE and Israel are to normalise diplomatic relations has largely been
welcomed by the international community, and has been seen as a bold and
progressive step by the UAE government.
"It is still early days but the economic benefits to the UAE could be wide
reaching across investment, tourism, security and telecommunications among
others, and potentially on the real estate sector," Dalton told Khaleej Times on
Saturday.
He said the announcement of the first flight from Israel to the UAE is a highly
significant milestone and is a precursor to one immediate benefit, which is the
influx of Israeli tourists into the UAE, giving this sector a much-needed boost.
"The indirect benefit of tourism could be on the UAE real estate sector. Israeli
property investors could open up another potential market that developers and
real estate brokerages could look to tap into. Right now is a good time to
invest in the UAE property market and many Israelis would certainly be
interested in such an investment opportunity," he said.
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