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Al Mazaya Holding weekly report states
the value of construction projects –
government and private – in the United
Arab Emirates underway at the present
time is AED660bn, according to official
figures. Despite the declines in the
price of oil and the knock-on affect to
government spending plans, we believe
the construction sector in Dubai will
grow by some 5.8 percent in 2015. In
2014, construction contributed 9.1
percent to GDP, an amount we consider
sufficient to insulate the industry from
any upcoming public sector spending
reviews. Construction remains too
important to Dubai’s long-term economic
diversification plans to be slowed
significantly – indeed, this year we
predict the government will increase its
spending on construction by five percent.
Mazaya Monthly Real Estate Report -
Week 1 - APRIL 2015
and the next. In fact, we believe the
current prices of materials better
reflects the reality of the market than
did the prices in 201314/, when high
oil prices inflated costs artificially.
Likewise, we expect the construction
sector in Abu Dhabi to experience
further growth during the current year
due to the continuing commitment
of the government to state-funded
projects intended to play a strategic
role in strengthening the economy for
the long-term. We do not expect the
declining oil price to have any effect on
the government of Abu Dhabi’s plans
to build airports, ports, factories and
other important infrastructure edifices
over the coming years, with the goal of
generating long-term returns. It is worth
noting, all of these projects will create
demand for housing in the emirate.