Damac chief confident of Dubai property market recovery by 2021

Hussain Sajwani was confident of the long-term attractions of Dubai and its property market. (Shutterstock)
Updated 12 November 2018

Damac chief confident of Dubai property market recovery by 2021

DUBAI: One of the UAE’s leading property developers believes that the property market will pick up again by 2021.
Hussain Sajwani, the billionaire founder and chairman of Dubai-based Damac Properties, told a World Economic Forum meeting in the UAE that it could take “a few years” before the current phase of the property cycle reversed, boosted by foreign buyers, especially those from China.
“As you appreciate the property market is cyclical everywhere in the world — and you see a few years up, and a few years down.

“We had our chance of a (bull) market from 2012 to 2015 … Then in 2016 we started seeing some slowdown with the oil prices coming down,” he said at the WEF’s Global Future Councils gathering in Dubai.
“This year has been a difficult year and I think next year will be another difficult year. I don’t see it’s going to be better than this year. We’re in that cycle of slowdown and it will take a few years. I hope that by 2020 with the Expo coming in, more people will be coming to Dubai,” he added.
Some real estate experts have forecast a recovery to the Dubai property market next year, as the expected “Expo 2020 effect” boosts the economy.
Sajwani was confident of the long-term attractions of Dubai.

“I genuinely believe Dubai is still a hidden jewel and a lot of people around the world still want to come to Dubai and they love it,” he said.
“If we just take one country, like China, if we can attract another few million tourists from China we can get more people to come here, spend time, buy property… and retail … I would hope by the end of 2020 or 2021 we start coming out of this slowdown.”

Record budget spurs Saudi economy

The budget sets out to lift spending and cut the deficit. (Shutterstock)
Updated 19 December 2018

Record budget spurs Saudi economy

  • “It is a growth-supportive budget with both capital and current expenditure set to rise.”
  • Government spending is projected to rise to SR 1.106 trillion

RIYADH: Saudi Arabia on Tuesday announced its biggest-ever budget — with spending set to increase by around 7 percent — in a move aimed at boosting the economy, while also reducing the deficit. 

However, analysts cautioned that the 2019 budget is based on oil prices far higher than today — which could prove an obstacle in hitting targets. 

Government spending is projected to rise to SR 1.106 trillion ($295 billion) next year, up from an actual SR 1.030 trillion this year, Minister of Finance Mohammed Al-Jadaan said at a briefing in Riyadh. 

The budget estimates a 9 percent annual increase in revenues to SR 975 billion. The budget deficit is forecast at SR 131 billion for next year, a 4.2 percent decline on 2018.

“We believe that the 2019 fiscal budget will focus on supporting economic activity — investment and wider,” Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), told Arab News.

“It is a growth-supportive budget with both capital and current expenditure set to rise.”

A royal decree by Saudi Arabia’s King Salman, also announced on Tuesday, ordered the continuation of allowances covering the cost of living for civil sector employees for the new fiscal year.

“The continuation of the handout package will be positive for household consumption by nationals,” said Malik. “We expect to see some overall fiscal loosening in 2019, which should support a further gradual pickup in real non-oil GDP growth.”

World oil prices on Tuesday tumbled to their lowest levels in more than a year amid concerns over demand. Brent crude contracts fell to as low as $57.20 during morning trading.

Malik cautioned that the oil-price assumptions in the Saudi budget looked “optimistic.”

“We see the fiscal deficit widening in 2019, with the higher spending and forecast fall in oil revenue,” she told Arab News.

Jason Tuvey, an economist at London-based Capital Economics, agreed that the oil forecast was optimistic, but said this should not pose problems for government finances.

“The government seems to be expecting oil prices to average $80 (per barrel) next year,” he said. 

“In contrast, we think that oil prices will stay low and possibly fall a little further to $55 … On that basis, the budget deficit is likely to be closer to 10 percent of GDP. That won’t cause too many problems given the government’s strong balance sheet. 

“Overall, then, we think that there will be some fiscal loosening in the first half of next year, but if oil prices stay low as we expect, the authorities will probably shift tack and return to austerity from the mid-2019, which will weigh on growth in the non-oil sector,” Tuvey said.

John Sfakianakis, chief economist at the Gulf Research Center, based in Saudi Arabia, said that the targets of the budget were “achievable” and the forecast oil price reasonable. 

“It is an expansionary budget that should spurt private sector activity and growth,” he said. 

“With Brent crude averaging around $68 per barrel for 2018 and $66 per barrel for 2019, the authorities have applied a conservative revenue scenario.”