‘Expect significant changes in Dubai’s property market’: Deloitte

2018 will be a year of change for Dubai’s real estate market. Across the hospitality, residential, retail, office and industrial segments, events such as the introduction of Value Added Tax (VAT) and 3D printing will transform the property sector, according to a new report from Deloitte.

“Developers, operators and investors will need to navigate their way through increasing geopolitical uncertainty, the adoption of disruptive technologies and the introduction of VAT. How well they do so will determine their performance in 2018 and beyond,” Martin Cooper, head of Development Strategy & Investment in Deloitte’s Real Estate and Construction team, said.

The introduction of VAT in the UAE will represent one of the biggest challenges for Dubai’s real estate market. “It not only forces the real estate sector to relook at their own practices and procedures, but those of businesses in the value chain with whom they interact,” Bruce Hamilton, a partner in Deloitte’s Indirect Tax team, said.

“How well the real estate market, of whom developers are a crucial sector, come to grips with these changes could impact on the sector in 2018 and for years to come.”

In addition, the introduction of VAT on construction materials and professional services may cause cash flow and working capital pressures for some developers.

Disruptive technologies such as 3D printing will also become more mainstream. The city is targeting for 25 per cent of new buildings to be 3D printed by 2025.

Other changes to expect are a more diverse development finance market and increased connectivity with the global economy.