“Dubai is not directly impacted by oil prices, but indirectly we really are because of the investment sentiment,” a senior expert said.
“We have seen an overall transaction volume of both land and property sales reducing by 20 percent in 2015, and that is still happening," Erik Volkers, associate director at CBRE Middle East, told Construction Week.
“2016 will probably not experience the same decline - 20 percent is a lot obviously.”
GCC countries have slowed down in terms of investing in the UAE, while other players completely “dropped out of the market,” like Russia.
Despite the drop in the number of transactions, Dubai Land Department (DLD) announced that the total value of real estate transactions jumped 22.5 percent to $72.7 billion in 2015, compared to $59.3 billion in 2014.
Indians have topped the list of expatriate real estate buyers in Dubai with investments of $5.4 billion in 2015 alone, according to DLD data, up 10 percent from $4.9 billion reported in 2014.
UK citizens came in second with an investment of $2.7 billion, while Pakistanis came in third with total realty investments of $2.1 billion.
Total investments from the Gulf Cooperation Council (GCC) members touched over $12 billion with investor number reaching 12,441.
GCC, India and Pakistan are currently the biggest investors, according to Volkers – most of which are “private individuals purchasing [in Dubai].”
“If Iran continues the way it does, it will have an impact here.”
Iran, he says, is still in early stages. “I think at the moment, there are a lot of things happening in Iran, and you see that the relations with national companies are being re-established in a lot of locations.”
“In terms of Iranians investing in the GCC or Dubai, it is, up until this moment, not yet become easier for them because the banking systems are still not yet in place. Even though some of the sanctions are lifted, not all of them are and I think that the banks are still very hesitant to go in and are being held back by other sanctions.”
Volkers says that 2016 will be a year to establish themselves with banking systems. Only in 2017 will the GCC and international markets be more open to Iranian investors.
“We don’t do business [in Iran] at the moment, but being an agent for a lot of corporate clients, we see some interest and companies looking to relocate and open offices [outside of Iran], which is a good sign,” he said.
There is tension at some points [between the GCC and Iran], but even if we look historically when things were a bit different, Iranians were one of the top investors in Dubai,” he added. I think that these investments are still welcomed – look at Dubai Marina, how many Iranians have bought places there? They have kept them or have taken part in investments [until today].”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.