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Thursday, Mar 31, 2011
Dubai’s property sector is benefiting from regional turmoil
Dubai: The Real Estate Regulatory AgencyThe Real Estate Regulatory Agency (RERARERA) is reviewing 90,000 units that will enter the market from now until 2016 in an effort to manage oversupply, according to Marwan Bin Galitha, the agency’s director general.
Dubai’s real estate sector will “definitely” benefit from the political turmoil in the region because of the comparative stability in the country, said Elain Jones, CEO of Asteco, at a seminar yesterday on the outlook for Dubai’s econ-omic sectors in 2011.
RERARERA has recorded an average of 50 new transactions everyday with an increase in empty land transactions by Indian, UK-based and Russian businessmen, Bin Galitha said.
A new mortgage guarantee initiative proposed by DIFC should be ready by 2012, easing banks’ lending risks and reducing interest rates for home borrowers, he said.
The local financial sector, after crisis management, has become stronger in 2011 compared to the recession years, according to Rick Punder, CEO of Emirates NBD.
Banks are now seeing fewer loans compared to deposits in their system, at a rate of 97 per cent now compared to 126 per cent in 2008, Punder said.
This means banks are more comfortable with their balance sheets. “Banks in Dubai can take provisioning on debts and still have good profits.”Asked why banks were still reluctant to lend, Punder said it was a question of time.
“It’s easy to criticise banks for not lending. But we are trying to find the opportunity to lend — a good opportunity — by choosing the right companies and the right circumstances,” he said.
He expects more lending by banks in 2011. “We are growing our loan book by five per cent. There will be growth in credit this year.”
The transportation sector, which currently contributes 12 per cent of the GDP, is also expected to drive Dubai’s economic growth this year, according to a government official.
The Roads and Transport Authority (RTA) is planning to increase public transportation capacity by 30 per cent by 2020, in a major investment worth “tens of billions”, according to Abdul Mohsin Ebrahim, CEO of strategic and corporate governance at the authority.
The RTA is expecting two million passengers by 2020 and plans to increase the Metro lines to 320km, tram to 270km, buses by 3,000km and marine transport to 450km, he said.
Tourism will continue to be one of the main pillars of the emirate’s economy, according to industry insiders.
A predicted nine million hotel and cruise visitors are expected to come to Dubai in 2011, compared to 8.6 million last year, said Udaya Indrarthna, executive director of the Department of Tourism and Commerce Marketing (DTCM).
In January, hotel occupancy rates were 76.6 per cent compared to 71 per cent in the same month last year, he added.
In 2010, 8.3 million tourists spent their holidays in Dubai, the world’s seventh most visited city, according to Gerald Lawless, Executive Chairman of the Jumeirah Group.
By Deena Kamel Yousef
© Gulf News 2011. All rights reserved.