UAE on Course for 9.8bn EUR Hotel Revenues by 2020
Profits for the UAE hotel sector are expected to increase almost two-fold over the next four years, ahead of the 2020 World Expo being hosted by Dubai, in preparation for which the Emirates have invested heavily in tourist infrastructure in recent years.
The UAE’s considerable investment in tourism has led to predictions that annual revenue is set to increase from €5.3bn in 2013 to a whopping €9.8bn by 2019.
Visitor attraction revenues are also forecast to double from €465m recorded in 2013 to more than €1.07bn over the next four years, according to a report published by Euromonitor International ahead of The Hotel and Leisure Shows in Dubai 2015 , which both opened this week.
In 2015, UAE hotel revenues are forecast to reach €6.5bn, while visitor attraction revenues will hit €570m. The UAE is the number one market in the Middle East and North Africa in terms of hotel room revenues, with over three times the amount recorded for Saudi Arabia and Egypt. The UAE also leads the region in new hotel construction, according to Christine Davidson, group event director of DMG events, organisers of the Hotel and Leisure shows.
Saudi Arabia currently leads the market for visitor attractions with €4.1bn in revenues forecast for 2015 compared with €569m for the UAE. ” But with massive leisure development currently underway across the UAE including five theme parks, three major museums and two safari parks, UAE’s visitor attraction revenues are forecast to almost double to €1.07bn by 2019. As more developments enter the pipeline, including last month’s announcement of the record-breaking Meydan One project featuring the world’s largest indoor ski slope, the UAE’s future for leisure and entertainment tourism looks exceedingly good, ” said Davidson.
According to a study by investment bank Alpen Capital, the UAE’s hospitality industry is expected to grow at a compound annual growth rate of 10% between 2013 and 2018. In the GCC, the sector is forecast to grow to €32bn by 2018 from €20.3bn in 2013, at an annual rate of 9.5%.
With much of UAE’s investment in tourism infrastructure taking place in Dubai, hosts of the 2020 World Expo, the outlook for the Emirate’s property market is bright and all fears that a property bubble is forming have diminished considerably. Mario Volpi, managing director of Prestige Real Estate in Dubai said: ” Dubai will be heading for very positive growth between now and 2020. Predicting a property bubble is difficult but assuming all the fundamentals are in place – interest from property buyers (not just flippers), population growth, job opportunities and a continuation of infrastructure improvements, I do not believe Dubai will suffer another large-scale downturn. Corrections may come but at present there is no real threat “.
Hotel rooms are the most popular investment vehicle in Dubai’s real estate market. When asked where best to investment in the Emirate, Volpi responded: ” The hotel market, as there will be a shortage of rooms, even with all the new hotels being built. The target of 20 million tourists per year will have to stay somewhere, so this new investing concept should bring about a good return from rent and capital appreciation “.
Developers are buoyed by the prospect of continued growth in Dubai’s property market. Mahesh Tourani director of Indigo Properties , a developer based in the Emirate with a number of completed developments and more in the pipeline said:
” Securing rights to host World Expo 2020 has set in motion faster-paced sale and resale activity in Dubai. This trend is expected to slowly accelerate and plateau somewhat towards the end of 2019 into early 2019. Keeping in mind the overall improvement in the world economy as well as its projected growth, the inflow of funds into the UAE from surrounding troubled nations and with Expo 2020 in the bag, the next few years are expected to see sustained growth in the city led by hotels, serviced apartments, commercial and residential buildings “.
Development activity across the UAE is presenting plenty of investment opportunity for those seeking high-quality income-generating property assets and its significantly improving tourist sector is set to underpin the security of real estate investments in the Emirates even further in coming years.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Demand for Family Homes Surges in Melbourne, Australia
Family homes are in hot demand in Australia, being snapped up enthusiastically in some of the busiest property auctions the country has ever witnessed, particularly in the metropolis of Melbourne.
Property in Australia is increasingly sold by auction in preference to the traditional ‘offer and acceptance’ method conducted through estate agents. Property auctions are particularly popular where there is a strong supply of property and in some Australian states, auction is the dominant method of sale.
Sales of houses and redevelopment sites continued to outclass Melbourne’s apartment market last Saturday, which saw the busiest property auction since May this year. Almost 1,100 properties were up for grabs on Saturday and buyers zoomed in on houses, with 78% falling under the hammer with a lower 59% clearance rate for units and apartments. Senior economist Andrew Wilson commented that the volume of sales at the auction was a ‘solid result’ given the high number of auctions taking place in Melbourne.
Although auction property clearance rates have improved since the beginning of September, real estate agents suggest there are significantly more family home buyers than sellers.
Demand for renovated ‘turnkey’ houses and well located land is resilient in many areas of Australia, although some established units are struggling to sell due to heightened competition from new housing units on the market. Property sector insiders suggest that the strongest bidding and sales activity is in the middle ring of Melbourne’s suburbs such as Doncaster and Mount Waverley.
However, some market commentators have noted that buyers are not displaying the sense of urgency that was apparent at auctions earlier in the year. Agents said ‘fear of loss’ was causing buyers to up their budgets because they believed house prices were increasing on a weekly basis at that time.
However, some market watchers say the urgency to buy is not as strong as it was in May because of the large increase in housing stock in the city’s suburbs. According to data from Australian estate agents James Buyer Advocates’, measuring how many bidders there are per auction for million-dollar-plus properties, the figure is down from three bidders per auction seen earlier this year, to two bidders.
” Every agent will say, ‘there is not that much stock’, ” the company’s head Mal James said. ” But that is just a standard line. As you come into spring, it is high stock level time and high-quality time. If you can’t find a house in the next few months, you are either unlucky or unrealistic “.
Several prominent agents in Melbourne suggest that its property market peaked a few weeks ago, with evidence that some wealthy home owners think that selling this spring may be a better strategy than waiting until 2016 or 2017.
Jellis Craig, director of Melbourne-based agents Craig Shearn said wealthy vendors are prudent and well advised. ” When you see their properties hitting the market after 20, 30 or 40 years, it can’t be all because they’re getting old, ” he said. “I am sure some of them are downsizing but I suspect there is an element of opportunism in there as well “.
Melissa Opie of Keyhole Property Investments said the Melbourne property market was patchier compared with April. In some areas properties were cheaper than they were four or five months ago. ” The AUD1m to AUD1.5m home market was a really tough market a few months ago but it has now come back a little “, she said.
Michael Cooney director of auction organisers Hodges said that last Saturday’s open house attendances were high and increased buyer activity is expected to continue. ” Stock levels are up by 20% to 30% this year. More stock means more buyer activity and we’re seeing a lot more higher-end family homes coming to the early October market “.
The Reserve Bank of Australia (RBA) commented that house price inflation was concentrated on detached houses in Sydney and Melbourne. ” Members noted that rapid growth in the construction of new apartments had helped to hold down inflation of their prices”, September’s board minutes said. “There had been a notable decline in the growth in lending for investment housing in July “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
More South African Buyers Expected in UK Property Market
With economic woes starting to affect the domestic housing market in South Africa, more nationals are expected to look to UK property assets for more security for their capital.
The South African property market has lost momentum in recent quarters and investors have increasingly looked to diversify into the British real estate market, as property transaction activity at home continues to decline.
According to the FNB South African Estate Agent Survey published by South African First National Bank (FNB), estate agents in the country point to a decline in residential market activity, suggesting slowing demand. The main factor behind the slow-down of domestic demand for property in South Africa is predominantly the issue of affordability, as income inflation fails to keep pace with property price growth.
Property prices continue to outstrip income growth in South Africa
Although some of the supply issues in South Africa are starting to ease, agents have already seen a reduction in viewings, meaning many of these new properties could be left unsold. John Loos, household and property sector strategist at FNB said: ” This shift to a slowing direction may finally be starting to reflect a multi-year stagnation in South African economic growth as well as gradual interest rate hiking by the South African Reserve Bank “.
He explained there are several economic reasons why demand will continue to weaken, most notably the fact that incomes have failed to keep up with house prices. House price inflation has spurred many South Africans to consider making a property investment but the rand’s underlying weakness and the volatile economy has taken its toll. In South Africa, prices have risen 27% in the last four years, but due to the devaluing rand, investors have lost 23% in value in real terms.
As this realisation hits more and more South African property investors, buy-to-let home buying in the country has declined from 9% of the overall market to 8% in the last three months, according to FNB.
UK BTL markets offer greater security and value growth potential for SA investors
The UK has become a favoured destination for many South African property investors, citing continued economic growth and sterling-based returns as the primary reasons for buying British real estate.
Propwealth is a UK-based company owned by South Africans that is taking advantage of heightened interest in UK income-generating property assets from wealthy South African investors by providing a comprehensive service from sourcing BTL investment opportunities in the UK to rental and property management, creating ideal armchair investments for South Africans.
Director of Propwealth, Anthony Doyle says the formula is simple. ” We invest in below market properties; we get the best yields possible, buy in up-and-coming areas and set up full management. This guarantees a strong tenant base and no headaches for the investor as the property is fully managed. Best of all, our South African investors own a piece of real estate in the UK. It’s all safe and secure “.
Propwealth’s main focus of investment is both in London and Liverpool which according to the company’s website ‘offer both cash flow and capital growth for investors developing a balanced portfolio. London is performing extremely well and offers exceptional capital growth. Liverpool is entry level investing and offers very good cash flow return’.
As a further incentive for wealthy South Africans looking to secure investment capital in the UK’s lucrative property markets, Propwealth works with large banks to secure their investors excellent offshore mortgages, normally at 70% loan-to-value (LTV), at interest rates of 3.99%.
Article by +Roxanne James on behalf of Propertyshowrooms.com
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