Dubai Real Estate Market Stabilises After 2023 Surge in Off-Plan Prices

Dubai’s real estate market, after an intense period of soaring off-plan property prices in 2023, is now entering a phase of stabilisation, according to a comprehensive report by Betterhomes. High-demand areas such as Dubai Hills Estate, Business Bay, and Jumeirah Village Circle were at the forefront of this property boom, with prices in these key locations increasing between 15% to 30%. This surge was primarily driven by a combination of strong buyer demand and a limited supply of new developments. However, as the market adapts, there are now signs of a healthy correction, with off-plan property prices declining by 4.2%, pointing towards a more balanced and sustainable trajectory for the sector.

This shift comes as developers introduce new projects, easing some of the pressure that was inflating prices. With more supply on the horizon, investors are becoming more strategic, shifting their focus from off-plan properties to ready-to-move-in homes. These ready properties have seen a marked increase in popularity, now making up 54% of all real estate transactions in the first quarter of 2024. Transaction volumes for these homes have jumped by 30%, signalling that buyers are increasingly favouring immediate returns. Many investors are opting for properties that offer either instant rental income or immediate occupancy, as opposed to waiting for lengthy construction timelines to see a return on investment.

Despite the rising interest in ready-to-move-in homes, the off-plan market remains steady. According to Betterhomes, off-plan property transactions continue to show a modest but stable 5% growth in transaction value. This indicates that while investors are more cautious, off-plan properties still hold appeal, particularly for those seeking long-term capital appreciation or those with a higher risk tolerance.

The report by Betterhomes also highlights the role of increased supply and more competitive pricing as key drivers of this market shift. As developers look to maintain their appeal to more cautious, risk-averse buyers, many are adjusting their strategies. This includes offering more flexible payment plans, introducing innovative financing options, and developing properties in emerging areas that promise strong future returns.

Betterhomes’ report concludes by affirming that the current state of the market presents solid opportunities for investors, whether they choose to invest in off-plan projects or ready-to-move-in properties. The stabilisation of off-plan prices combined with the rising demand for ready homes is reshaping investor preferences. However, the overall outlook remains positive, with both sectors providing potential gains depending on individual investment goals. Betterhomes is committed to assisting clients in navigating these dynamic market changes, offering expert guidance to help investors make informed decisions based on the latest market trends.

GCC Central Banks Cut Interest Rates Following US Federal Reserve’s Lead

The central banks of the GCC have reduced interest rates following a significant move by the US Federal Reserve, which cut its benchmark rate by 50 basis points on Wednesday.

The Federal Reserve’s decision to lower its rate by half a percentage point now places it within a range of 4.75% to 5%. This marks the first reduction after 11 consecutive rate hikes over the past 16 months, followed by a lengthy period of stability. More cuts are expected, with the Fed indicating that this could be the start of further reductions extending into 2025.

In response, the UAE Central Bank (CBUAE) announced it would lower the base rate for its Overnight Deposit Facility (ODF) by 50 basis points, from 5.40% to 4.90%, effective Thursday, September 19, 2024. The CBUAE will maintain the borrowing rate for short-term liquidity at 50 basis points above the base rate for all standing credit facilities.

Saudi Arabia’s Central Bank also reduced its repo rate by 50 basis points, bringing it down to 5.50%, and cut its reverse repo rate by the same margin, reducing it to 5%.

Qatar followed suit, cutting its key interest rates by 55 basis points. The lending interest rate is now set at 5.70%, the deposit interest rate at 5.20%, and the repo rate at 5.45%, according to an official statement.

The Central Bank of Bahrain (CBB) also announced a 50 basis point reduction in its overnight deposit rate, from 6.00% to 5.50%, effective September 19. The CBB emphasized that the decision aims to maintain monetary and financial stability amid global financial market fluctuations.

Meanwhile, Kuwait’s Central Bank (CBK) made a smaller cut, reducing the discount rate by 25 basis points, lowering it from 4.25% to 4%. CBK Governor Basel Al-Haroon highlighted that Kuwait’s inflation rate has significantly slowed, from 4.71% in April 2022 to 3% in July 2024, justifying the modest reduction.

Federal Reserve’s Strategy and Market Impact

The Federal Open Market Committee (FOMC) reaffirmed its commitment to achieving maximum employment and maintaining inflation at a 2% target in the long run. With growing confidence that inflation is moving sustainably toward this target, the Committee views the risks to employment and inflation as relatively balanced.

The Fed also indicated it would continue reducing its holdings of Treasury securities, agency debt, and mortgage-backed securities as part of its broader economic strategy.

Fed Chairman Jerome Powell, speaking after the announcement, noted that the rate cut reflects the Fed’s belief that an appropriately adjusted policy can sustain labor market strength while gradually lowering inflation to the 2% goal.

The market reacted positively to the news, with US stocks rallying, while the dollar dropped by 0.5% to its lowest level in more than a year. Gold prices surged, hitting a new high of $2,591.19 per ounce.

This coordinated effort between the GCC central banks and the US Federal Reserve underscores the global push to balance economic growth, inflation control, and financial stability amid ongoing uncertainty in the global financial landscape.

 

Ralph de Geus: Pioneering Entrepreneur with a Vision for Innovation

In the dynamic world of entrepreneurship and innovation, Ralph de Geus stands out as a trailblazer with a remarkable portfolio of ventures. From his strategic leadership roles to his influential investments, de Geus continues to make a significant impact across various industries.

Currently serving as the Director at GMA General Trading L.L.C., a global supply business, de Geus brings a wealth of experience to the table. His diverse career highlights include founding and managing several high-profile companies, including 433 B.V., BALR., and Juramy B.V. At 433 B.V., he played a crucial role in the video and photo content publishing industry, while BALR. focused on fashion and lifestyle, and Juramy B.V. invested in emerging internet stars.

De Geus’s influence extends to Wannahaves, a social brand media agency, where he served as a stakeholder and managing board member. His entrepreneurial spirit is also evident in UNIQ Consultancy – FZCO, which invests in media, e-commerce, and technology sectors. Additionally, he was a key player at Superbox / Truly Yours, focusing on grooming and lifestyle products.

Notably, de Geus’s earlier ventures include ownership and leadership at www.voetbalprimeur.nl, a leading football website in the Netherlands, and roles at Interrocks B.V. and Yanomo as an internet entrepreneur and advisor. His strategic insights have driven growth and innovation across these platforms.

Recent developments in de Geus’s career further underscore his commitment to innovation. He has recently joined the Advisory Board of Oktagon MMA, Europe’s premier MMA show, where he will collaborate with industry visionaries Denise Höfer, Pavol Neruda, and Ondřej Novotný. This role signifies a strategic expansion into the sports entertainment sector.

Moreover, de Geus has become a key figure in the UAE’s esports scene by joining the Advisory Board of True Gamers. True Gamers is a leading esports gaming cafe that aims to reshape the future of esports globally. His involvement includes initiating new partnerships, exploring new markets, and connecting with potential investors, reflecting his dedication to advancing the esports industry.

In addition to these roles, de Geus has been instrumental in a groundbreaking agreement with Emirates Industry for Camel Milk & Products, known as “Camelicious.” This deal aims to bring high-quality camel milk products to Europe, highlighting his interest in diverse and sustainable business opportunities.

Ralph de Geus’s career trajectory demonstrates his exceptional ability to innovate and lead across various sectors. From fashion and media to sports and technology, his contributions continue to shape industries and inspire future entrepreneurs.