Dubai Economy Back On Growth TrackFriday, July 15, 2011
There is a buzz in the air: Dubai's economy has come out of recession and growth is picking up. Interesting times are ahead. However, the big question is, is the real estate sector picking up? "The economy is back on a growth track and we see the market picking up. We have witnessed steady growth and we look forward to a better growth track going forward," Hesham Abdullah Al Qasim, Vice-President and Chief Executive Officer of the Dubai Real Estate Corporation (DREC), told Gulf News in an interview. Asset value erosion has been arrested while in some places prices of properties are showing signs of recovery, he said. "Asset demand is going to go up and we see prices of villas are beginning to appreciate in certain locations in Dubai," he added. The Dubai government established DREC in June 2007, combining the assets of the Development Board and Dubai Real Estate Department, through Law No 14 that says the corporation shall be a public commercial institution.
With DREC the Dubai government has effectively corporatized its rental and leasehold assets under a single entity. In order to help the market and ease pressure on rents, DREC earlier undertook a massive housing scheme to provide affordable homes. The new 5,000 units are part of the pack. This has helped the government to effectively balance the rental market by revising rents periodically (upwards or downwards depending on the demand and supply situation) and protect residents from rent-related inflationary pressures as the market became too commercialized. DREC has a residential portfolio of 25,000 units currently being managed by its asset management arm, Wasl Properties, with an occupancy rate of 92-93 per cent. The company has delivered about 5,000 units during the last four years and has a few hundred units currently under development. The Dubai Government amended the law that helped set up DREC in 2007, bringing it under the direct control of the Ruler's Court, from the Investment Corporation of Dubai, giving it a wider mandate to expand its portfolio and achieve greater financial independence.Source: Gulf News