The weak US dollar, to which the dirham is pegged, increases the affordability of UAE real estate for many foreign buyers and could boost demand in the face of subdued market conditions, though it will be no panacea, analysts say.
“Looking at the top buyer groups, where the currency is not pegged, who invest in UAE property we can see that on a currency basis alone, compared to January 2017, Indian rupee-denominated buyers would now find purchasing property in the UAE 6 per cent cheaper and British pound buyers would find it 13 per cent cheaper,” said Taimur Khan, senior analyst at consultancy Knight Frank.
The dollar index fell nearly 10 per cent in 2017 and is approaching a three-year low, with confidence in the historical might of the US economy flagging. Some hedge-fund managers anticipate the greenback could shed another 10 per cent of its value in the coming year. The UAE dirham – like most GCC currencies – is pegged to the dollar, and has naturally depreciated in value. Purchasing property in the UAE is likely cheaper for many of the foreign buyers that make up a sizeable chunk of the country’s real estate investor base.
Foreign buyers accounted for around 20 per cent of real estate transactions in Dubai in the 18 months to June 2017, according to statistics from the Dubai Land Department. The top buyers were from Saudi Arabia, India and the UK, the department said.
“The fall in the dollar is likely to have contributed to Dubai’s total property transaction volumes increasing by 14 per cent year-on-year in 2017,” Mr Khan said. “As a result of the currency drop and other draws of the market we expect this deprecation will spark some additional interest.”
The uplift in property transactions in 2017 was also due to a very weak 2016, when international purchases recorded a 30 per cent year-on-year decline, noted Tim Fox, chief economist at Emirates NBD bank. Still, the weaker US dollar “probably played a part in it”, he said. "To the extent that the dollar is likely to remain soft in the medium term, this should continue to underpin foreign demand.”
However, analysts cautioned against assuming the weak dollar would be the reason to jumpstart a stagnant UAE real estate market, which has recorded falling sales and rental prices over the past two years.
“More fundamental factors such as supply and demand, job market and government spending have a far more direct impact on property markets,” said Mohamed Bardastani, senior economist, Middle East, at research group Oxford Economics.
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Read more:
VAT clouds UAE’s commercial real estate market in 2018, says JLL
Which currency will come out on top in 2018?
Why GCC states should ditch the dollar peg and switch to a currency basket
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Dubai residential property sales prices fell on average 1.3 per cent in 2017 compared to 2016, according to data from market research consultancy Reidin, while sliding an average 7.6 per cent over the same period in Abu Dhabi. Rental prices were down even more heavily, over 10 per cent in some parts of the country.
The decline in prices reflects high volumes of supply, subdued demand due to a softer job market, and cuts in public expenditure over the past year. Meanwhile, the introduction of VAT this year added costs to commercial property transactions.
“It is rather difficult to disentangle and isolate the impact of a weaker dollar on the UAE property market from the more familiar market factors…which are more fundamental to the overall performance of the property market,” Mr Bardastani said.
“Demand for real estate still seems subdued, so we are sceptical about whether people are buying more in general, let alone solely due to the dip in the currency.”
Rather than creating a real estate market boom, the dollar drop is more likely to drive prospective buyers who are already considering a purchase to a quicker decision based on affordability.
“I don’t expect this recent weakening to drive a boom in the sector as much as continue to provide room to some buyers, given the limited impact on purchasing power,” said Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes bank.
The strength of the dollar particularly in 2014 to 2016 was a key headwind impacting external demand for UAE real estate so the dollar weakening is “definitely a positive development”, added Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“However, there are other factors limiting external demand for properties – notably, ongoing weak regional demand due to slow economic growth in key GCC buyer markets such as Saudi Arabia,” she said.
The recent uptick in oil prices, which has fuelled renewed growth in GCC economies, as well as expansionary fiscal policy and increased government spending on infrastructure in the run-up to Expo 2020 Dubai is expected to drive a recovery in UAE real estate from 2019, experts added.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
COMPANY%20PROFILE
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Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Student Of The Year 2
Director: Punit Malhotra
Stars: Tiger Shroff, Tara Sutaria, Ananya Pandey, Aditya Seal
1.5 stars
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
MATCH INFO
Uefa Champioons League semi-final:
First leg: Liverpool 5 Roma 2
Second leg: Wednesday, May 2, Stadio Olimpico, Rome
TV: BeIN Sports, 10.45pm (UAE)
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Killing of Qassem Suleimani
'THE WORST THING YOU CAN EAT'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
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BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Race card
5pm: Maiden (PA) Dh80,000 (Turf) 1,600m
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m
6pm: Arabian Triple Crown Round-1 Listed (PA) Dh230,000 (T) 1,600m
6.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
7pm: Maiden (PA) Dh80,000 (T) 1,200m
7.30pm: Handicap (TB) Dh100,000 (T) 2,400m
Episode list:
Ep1: A recovery like no other- the unevenness of the economic recovery
Ep2: PCR and jobs - the future of work - new trends and challenges
Ep3: The recovery and global trade disruptions - globalisation post-pandemic
Ep4: Inflation- services and goods - debt risks
Ep5: Travel and tourism
