Dubai is a key barometer of region’s construction market

The emirate is a critical barometer of the health of region’s construction market, according to the soon to be released Meed Insight report.

DUBAI // The emirate is a critical barometer for the health of the region’s construction market, the Meed Insight report says.

In 2006, projects awarded in Dubai were worth US$28 billion (Dh102.8bn), a fifth of the GCC total.

The global downturn pushed Dubai’s share of GCC projects down to 5 per cent. But last year $22.7bn worth of projects were awarded – about 15 per cent of region’s total – the GCC Construction Projects Market 2015 report says.

While regional projects include sectors such as transport, power and oil and gas, in Dubai the market is mainly property.

“Dubai and the UAE have always been the pioneers for projects in the region,” said Ed James, head of Meed Insight. “It had the first metro in the region in 2009 and now almost every country in the region is planning a metro project.”

There is $105bn worth of projects under construction in the UAE, with 56 per cent of these in Dubai.

Dubai’s hosting of the Expo 2020 is one factor for the rebound.

“Dubai 2020 helps in terms of confidence in the market and because the market gains confidence, with more people coming in to live, you need more houses,” said Mr James, author of the GCC report.

“With more business coming in, you need more commercial space.

“The Expo has certainly helped the construction market but regardless, the market was on the way up.”

Lessons have been learnt from the 2009 crash, with tighter regulations, caps on mortgage lending and regulations to control speculators.

“The years before 2008 were driven by off-plan sales,” said Mr James.

“There was a real estate frenzy with prices increasing dramatically. Added to this were global economic and banking problems. This time, you have much fewer small-scale, inexperienced developers.”