Almasah international real estate: The real estate market in Dubai

Résumé du document

In February, I landed in Dubai for the first time, after having heard so much about it. I was astonished by the number of towers already built at that time but more by the huge amount of cranes and construction sites. Therefore, I decided to do my internship for a real estate broker. I quickly understood how easy it was to earn a lot of money with the growing flow of expatriates demanding accommodation, versus the lack of availabilities. As a result, I started to work as a freelance agent till July 2006, when I left the country to complete my studies. As I returned to Dubai in 2008, the skyline had totally changed, with towers and projects that have popped out of the sand in such a short lapse of time. Those experiences as a "trainee" in the real estate sector in Dubai, have brought me much, but something above the others: I have discovered the industry in which I want to start my career and this is priceless. While I was out in the field, I had two tasks. Not only was I dealing with customers, and acting in actual situations but I was also trying to analyze the environment I was evolved in, trying to step back, keeping a critical point of view and meeting with as many people as possible, from different backgrounds, in order to ensure the credibility, objectivity and accuracy of this research.

Extraits

[...] Moreover, AIRE will also be able to consider diversifying its activities if it wants to moderate the risk of the real estate market as costs will be split. There is a part further dedicated to the suggestion of diversifying the activities Use of technology for operations Another suggestion to help AIRE remain efficient on the rental market, for its brokerage activity is the use of technology for its operations. I explained in the part explaining the brokerage activity how difficult it is to offer customers a USP. [...]

[...] Thanks to this vertical concentration, AIRE will have stronger tools to succeed. (cf .1) 3.2 Partnership As we explained in the part about the growth strategy, AIRE has started since a strategy of partnership with developers in order to increase the activity for its brokerage department. However, this kind of partnership is not valuable on the long run because it links the companies just for a limited period of time. In this example, AIRE is linked with the Saudi developer Tanmiyat until the project is sold out. [...]

[...] The government would never take the risk to flood the market and compromise their own benefice. It is easy to regulate the market when you know that, according to Fitch, Nakheel was counting for 53% of the total housing units to be handed over in 2007. The number of residential properties developed by the government represents almost 75% of the total offer. In order to keep the level of demand higher than the supply, which allows a raise in prices, the 3 main developers deliver projects much later than expected or sometimes simply cancel them. [...]

[...] It is not the first time the Emirate sets so high goals and reaches them in time. In 2000, during the last economic plan announced by Sheikh Mohammed, the goal to reach was a GDP of 110.100 million aed 19'000 million EUR) in 2010. The goal was surpassed in 2005, when the Emirate GDP reached 140.200 million aed 24.000 million EUR). Dubai's fabulous economic performance is explained by its diversity and the vitality of its economy. In each economic plans or financial reports, the same key industries appear to contribute to this fast growing economy: Real Estate and Construction, Agriculture, Tourism, Financial services, Wholesale trading. [...]

[...] Rental transactions: In Dubai, only tenants are charged by the agencies. Usually, owners post their properties with as many agencies as possible as it is free of charge for them. They provide general details about the property such as the location, the square footage, the suggested price and the conditions. Having rarely an accurate idea of their properties values on the rental market, they leave it to the agents who can estimate it, compared to other properties rented out during the same period. [...]