What's at Stake this week?
January 14, 2023
2023 is off to a great start in Dubai real estate – from $626Mn in one day to $2.7Bn in one week! Land plots led the portfolio of properties sold, followed by 1K+ apartments and villas which sold for a cumulative $1.33Bn 🚀 2023, you’re looking good already! Let’s take a closer look at major market news from Dubai and Saudi Arabia this week 🔍
D33 to boost Dubai's economy twofold in 10 years
Ambitious, but achievable goals
The Dubai government recently announced its highly anticipated economic agenda, “D33”, which aims to double the size of the economy by 2033 and cement its position as one of the top 3 global cities. In order to do so, 100 transformative initiatives were approved with a cumulative target of AED 32Tn (USD $8.7Tn) within the dedicated time frame.
D33 is already in motion to quadruple the emirate’s foreign trade to over AED 25Tn, with the goal of adding 400 new locations to its trade map, according to Helal Almarri, Director General of Dubai’s Department of Economy and Tourism, in his interview with Bloomberg. He continued to mention that FDI remains an important facet under the D33 agenda, as the government aims to fuel investment growth to over AED 650Bn, with yearly contributions of AED 100Bn for digital transformation efforts.
Within the scope of the D33 agenda is Sandbox Dubai, an initiative that seeks to transform Dubai into a major hub for startups and SMEs to foster business innovation by providing a space for the testing and promoting of new products and technologies.
Other vital sectors, like real estate, will stand to gain from the agenda, with the enablement of growth of the market and its competitiveness compared to other global hubs, making returns on property investments all the more lucrative for investors worldwide. This is quickly becoming a reality based on Sheikh Mohammed bin Rashid al Maktoum’s tweet that “over 300K global investors are helping build Dubai into the fastest growing global city.”
The bottom line? What’s so appealing about the D33 agenda is its easy complementarity to other strategies in implementation, like the 2040 Urban Master Plan which was created with the motivation to transform Dubai into the best city to live, work, and tour in. With government spending set to increase greatly to AED 700Bn, there is a lot of legroom for the private and public sectors to cooperate in expanding investments in emerging markets.
New year, more to expect from the PIF
Introducing the Diriyah Project
Another giga-project is in the works in Saudi Arabia, funded by its Public Investment Fund, alongside other large developments like NEOM, the Red Sea Project, the Qiddiya entertainment city, and more. Set to serve as a major landmark development for the Kingdom, the Diriyah Project is expected to impact the economy significantly and expand the cultural landscape.
The sustainable and environmentally friendly project is to be built on the grounds of a UNESCO World Heritage site, on the outskirts of Riyadh and will accommodate cultural, sports, and entertainment facilities, along with dedicated space for an advanced technology hub and innovation center. In line with the Kingdom’s plan to reduce its oil dependency, the project should help to attract a large number of tourists and facilitate the continued influx of foreign investment, contributing positively to the non-oil sector.
This project and others in progress aim to diversify the Kingdom’s revenue sources and are being implemented in phases so as to complement growth projections in travel, tourism, hospitality, and entertainment this year and beyond. On the real estate front, activity continued to decline by 53.7% during the first week of January 2023, due to what experts deem to be “weak liquidity flows caused by higher interest rates”.
The value of deals was also down by 47.5% in the first week, particularly in the residential sector, despite registering 19% growth during the week prior. Despite the lower performance, a report from PwC Middle East noted the significant transformation of the market due to various governmental initiatives much like the project mentioned above, meant to attract more tourists and build momentum.
Measures like improving access to finance and standardizing regulations, in addition to increasing access to housing for Saudi families will continue to push the demand for housing in the Kingdom up. The figures reported that demand stood at 99.6K units in 2021, and should rise by more than 50% to reach 153K houses by 2030, in line with what was laid out for the sector in Vision 2030.
The bottom line? The housing market in Saudi Arabia appears to have a bright future ahead, thanks in part to an influx of foreign direct investment and numerous large-scale projects that are aimed at attracting residents and investors from a variety of backgrounds.
More than 600 investors believed in our first luxury property!
In our commitment to provide a wider selection of properties, the AED 5M+ Boulevard Point unit was our first luxury listing 💎 In funding it, we achieved a major milestone that could not have been possible without 600+ new and repeat investors from around the world 🌍
This accomplishment demonstrates the impact that real estate crowd investing has on a global scale and the potential for financial inclusion in a sector traditionally reserved for high-net-worth individuals 🚀
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