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Background


The property sector in the Gulf Cooperation Council (GCC) region grabbed the attention of investors and the global business community when the Dubai Government made a landmark announcement in May 2002 granting freehold ownership of land and property to foreigners – a move that broke all norms.

It was a few months after September 11, 2001 – that changed the world, well almost. Arab capital, estimated to be more than $1 trillion at that time, which suddenly became unwelcome to the West, began to flood the GCC economies. However, due to a lack of adequate investment vehicles, these monies were stuck in unproductive ventures or waiting for economies to open up to unlock hidden opportunities.

It is at this backdrop, that His Highness Shaikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai as the then Crown Prince of Dubai, opened Dubai’s Property Sector for foreign freehold ownership that changed the scenario entirely.

The repatriated Arab capital from the West that was waiting for investment opportunities, suddenly found a fertile land. Billions of US dollars began to pour into Dubai’s large sand dunes that quickly began to transform the sandscapes into master-planned landscapes – that gradually turned into beautiful cityscape. Dubai quickly began to benefit from a massive real estate-driven boom that eventually pushed Dubai’s GDP in to high gear. The property boom drove the growth of the emirate’s economy from 2002 to 2008. As a result, construction, building materials, interiors, wood supply, smart home technology began to witness a solid growth. Hundreds of thousands of jobs were created within the span of a few years.

Dubai’s success encouraged other states. A number of states, such as Ras Al Khaimah, Ajman, Sharjah, Abu Dhabi, Qatar, Oman and Saudi Arabia, followed Dubai’s example by opening up the sector for foreign ownership and investment. For a while, real estate and construction sectors gradually replaced oil and gas as the major contributors to economic growth.

However, the boom in real estate sector created so much opportunity and so many jobs, that despite a massive growth, the sector couldn’t cope with rising demand, creating a demand-supply mismatch that pushed the prices to a new high every month. To make things worse, the speculators played their role to jack up real estate prices and banks continued to drain public deposits to fuel the propery boom – creating a bubble that was ready to bust any time. And that disaster happened in September 2008, when Lehman Brothers collapsed in the US and that drained liquidity from the market.

Lack of professionalism among real estate companies and brokers, at that time, added to the suspicions among investors and buyers over the sector’s performance. However, the region’s media could not play its due role in projecting the sector properly. There was a need to highlight the sector’s performance to the consumers with real time information, data and statistics. The sector was, at that time, also suffering from burning problems that need to be addressed.

Consumer awareness remained a critical issue while lack of rules and regulations are orders of the day – that the media failed to address adequately. Lehman Brother’s collapse triggered a debacle in Dubai’s real estate market that pushed hundreds of professionals out of jobs. It is at this backdrop, Gulf Property was launched to offer a fresh perspective to the industry and help it recover. More than two years later, we, along with quality players are remaining to serve the industry while the rest have disappeared from the market.

That’s why Gulf Property, a magazine with a promise to be different, appeared at the right time and at the right place. More than two years after our launch, all other real estate publications folded up while we emerged stronger day after day, to serve the industry and to offer a better altrnative to our readers.

 

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