Category: News and Media

The UAE has improved its standing on the esteemed IMD World Competitiveness Ranking, moving up three spots to take seventh place internationally this year, which is evidence of its continued economic progress. This yearly research assesses how countries use their unique assets to create long-term economic growth and prosperity. The UAE’s progress is a testament to its strong business climate, reliable infrastructure, and competitive tax system—all of which were emphasized as crucial elements in the evaluation of the ranking.

The UAE is making great progress to climb into the top ranks of the global index, which is led by Singapore, Switzerland, and Denmark, according to the IMD study published in June 2024. In the region, Bahrain came in at number twenty-one, Saudi Arabia at number sixteen, and Qatar at number eleven, indicating a solid performance by Gulf countries in the

For 36 years, the IMD World Competitiveness Center (WCC) has released its rankings, providing in-depth analyses of the competitive advantages and disadvantages of 67 economies around the globe. The 164 data indicators in this year’s edition covered important pillars like corporate agility, government efficiency, infrastructure quality, and economic performance. Data sources included esteemed organizations like the World Bank, International Monetary Fund (IMF), and Euromonitor International, alongside input from over 6,600 global executives surveyed for their perspectives on economic competitiveness.

The United Arab Emirates’ ascent in the global competitiveness ranking highlights the nation’s tenacity and astute investments, while also establishing it as a crucial participant in the international economic arena. As it continues to enhance its business environment and infrastructure, the UAE is poised to sustain its

Comprehending Global Competitiveness Rankings

Rankings of global competitiveness offer important insights into how nations allocate resources and implement policies to promote wealth and economic progress. The IMD World Competitiveness Ranking is a well-known ranking in this industry that assesses countries using a wide range of factors.

The IMD World Competitiveness Ranking: What is it?

An yearly evaluation that compares the competitiveness of economies around the world is called the IMD World Competitiveness Ranking. It looks at elements that are important for economic success and corporate efficiency in different countries. Infrastructure, business, governance, and economic performance are among the factors taken into account.

Insights from the Latest Rankings

The UAE showed notable improvement in the most recent IMD World Competitiveness Ranking, moving up three points to take the seventh slot worldwide. This increase is attributable to the UAE’s strong business climate, dependable infrastructure, and advantageous tax system—all of which are critical for drawing in capital and promoting economic expansion.

Important Results and Regional Comparison

As per the IMD report, nations like as Singapore, Switzerland, and Denmark top the worldwide ranking, exhibiting excellent competitive practices. Regionally, Bahrain, Saudi Arabia, and Qatar all achieved noteworthy positions that demonstrate the Gulf region’s general competitiveness in the world economy.

Methodology and Data Sources

The IMD World Competitiveness Center utilizes a rigorous methodology, drawing from a comprehensive dataset of 164 statistical indicators. These indicators are sourced from reputable organizations such as The World Bank, the International Monetary Fund (IMF), and Euromonitor International. Additionally, the ranking incorporates insights from a global executive opinion survey, providing a holistic view of each country’s competitive landscape.

Implications for Business and Policy

For businesses and policymakers, understanding global competitiveness rankings is crucial for strategic decision-making. It offers insights into the strengths and weaknesses of economies, helping businesses identify attractive investment destinations and governments refine policies to enhance competitiveness.

The IMD World Competitiveness Ranking serves as a vital tool for assessing the global economic landscape, highlighting countries that excel in creating conducive environments for business and economic growth.

Dubai housing prices will continue to rise in 2024, with capital gains in the villa segment projected to hit 10-year highs.

According to international consulting group ValuStrat, which released its April price index for the emirate, apartment prices will also maintain an upward trajectory, albeit at a slower pace than villas.

“Apartment price growth, which only started gaining momentum in the second half of last year, is expected to reach new record highs this year,” Haider Tuaima, Director and Head of Real Estate Research told Zawya. “It is highly likely that villa capital gains will exceed the record highs of 2022.”

The ValuStrat Price Index (VPI) for April revealed the average villa valuation per square foot surpassed AED 2,000 for the first time in 10 years. Villas topped the previous market peak, with Tuaima saying that villa prices have already doubled since the pandemic and surpassed the peak prices of 2014.

Villa capital gains recorded a 2.4% month-on-month uptick in April and a 31.2% rise since the previous year. The figure is a close second to 2022, which saw the highest rise in a decade, with villa prices witnessing a 34.1% spike.

Communities that saw the highest price increase were sought-after communities including The Palm Jumeirah, which saw 40.1% hike, followed by Jumeirah Islands (39.5%), Dubai Hills Estate (36.2%), Green Community West (31.4%), and Emirates Hills (31.1%).

The apartments segment witnessed a 21.3% year-on-year increase, with a monthly rise of 1.6%, according to the index.

On average, the VPI reached 170.8 points in April, marking a 26.1% annual increase, with a monthly rise of 2% for the emirate’s overall residential sector.

Price concerns

According to ValuStrat’s Tuaima, there is a growing concern over value for money and buyer affordability.

“As seen in previous cycles, external global shocks could negatively affect market sentiment…. Just after the pandemic, the average sold home was 2,000 sq ft and cost AED 1.7 million, translating to AED 866 per sq ft. Today, the average property size has decreased to 1,427 sq ft, while the cost has risen to AED 2.2 million, or AED 1,516 per sq ft,” he explained.

Tuaima continued: “Furthermore, villa rentals have stabilised over the past six months, indicating that tenants can no longer afford significant rent increases.”

The rental highs are also seeing many swap a rent cheque in favour of a mortgage, with the VPI figures indicating that annually, off-plan Oqood (contract) registrations increased by 76.4% year-on-year, while the volume of ready home transactions was up 9.5% since last year.

While many industry experts are eyeing a rise in the supply of residential units to trigger a price correction in the future, with a Dubai Property Watch report last week pegging that number at 64,400 new units by year-end, Tuaima remained cautious.

“There are concerns about oversupply, particularly with upcoming projects on the outskirts of the city targeting low and middle-income households. This could lead to a market correction, but only if all under-construction projects are completed on schedule, which hasn’t been the case so far,” he said.

Property investors are increasingly targeting communities in some parts of Jebel Ali and neighbouring developments amid plans to move the operations of Dubai International Airport (DXB) to Al Maktoum International, according to a new analysis.

The “new areas in focus” among those looking to own residential units now include Dubai South and other neighbourhoods like Dubai Hills Estate, Palm Jumeirah, Arabian Ranches and Al Furjan, PropertyFinder noted in a new report released on Wednesday.

“Following the recent announcement regarding the shift of airport operations, searches regarding areas to own villas showed a significant uptick for interest towards Dubai South (Dubai World Central),” the real estate platform said.

Late last month, Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, announced that all operations at DXB will be transferred to Al Maktoum International Airport “in the coming years.”

He confirmed that the designs for the new passenger terminals at Al Maktoum have been approved. The facility will be five times the size of DXB, currently the world’s busiest aviation hub for international traffic.

The Dubai ruler noted that property demand in the area is expected to increase. “As we build an entire city around the airport in Dubai South, demand for housing for a million people will follow,” the ruler said.

The market is expected to remain “dynamic” as a result of the airport project, according to Cherif Sleiman, Chief Revenue Officer at PropertyFinder.

“We expect the market will remain dynamic following announcements, such as the shift of operations from Dubai International Airport to Al Maktoum International Airport, sparking renewed demand across developing areas.”

While new areas are now gaining interest, the traditional favourites like Dubai Marina, Downtown Dubai, Jumeirah Village Circle, Business Bay and Palm Jumeirah “remained of interest” for potential apartment buyers, PropertyFinder added.

In April 2024, the Dubai real estate market saw a year-on-year increase of more than 45% in sales transactions, 11,607 as compared to 7,999 in April 2023, the portal said.

Further adding to the growth in the first quarter of the year, the value of transactions also posted a significant upswing, reaching almost AED 32 billion and marking an increase of more than 21% compared to the same month in 2023.

UAE, Dubai

The UAE is the most preferred choice for real estate investors and Dubai in UAE is the most thriving location with numerous advantages. Dubai is among the real estate investment best cities because of its higher rents and profitability in addition to its low tax rate. The UAE’s citizens’ superior purchasing power drives the real estate industry. Consequently, it is a wonderful moment to purchase real estate in Dubai. Both the economy and the people are growing, helping Dubai’s real estate market.

In the first quarter of 2023, the Dubai real estate recorded its all time high transaction. During this period a total 36,946 deals were registered (43.2% higher compared to the 2022). If we talk about the Year-on-Year increase for April 2023 then it was approx 16.2%  The year-on-year increase for April alone was 16.2 percent. So, there is almost half a year left for 2024 and the future is bright for real estate investors. 

Foreign Ownership Laws in Dubai

As per Article 3 of Regulation No. 3 of 2006 determining areas for ownership by foreigners of property in the Emirate go Dubai (pages 129 – 132) indicates the land plots designated as freehold properties. In UAE and particularly in Dubai Foreign Ownership is permitted in freehold areas & communities. This means that any foreigner or expat can buy property here but only within the boundaries of these freehold  areas.

Tax Liability in Dubai

The most recent update regarding this matter has been provided through the unveiling of Cabinet Decision No. 56 of 2023, pertaining to Federal Decree-Law No 47 of 2022. According to this announcement, foreign companies and non-resident juridical persons are now required to pay a 9% tax on all income derived from real estate and other immovable properties within the country. This tax applies to properties held for investment purposes or utilised for business activities.

https://www.hcorealestates.com/ 

As one of the most sought-after global destinations for real estate investment and development, Dubai has witnessed a significant surge in its property market in recent years. However, with this growth and attractiveness comes the risk of money laundering and terrorist financing. To safeguard its reputation and maintain its position as a thriving financial hub, Dubai has taken proactive measures to combat these financial crimes through robust Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. In this blog post, we will explore the importance of AML/CFT measures in Dubai’s real estate sector and their impact on promoting transparency, integrity, and sustainability in the industry.

1. Preserving Dubai’s Reputation

Dubai’s reputation as a leading global business and financial center is a significant driving force behind its real estate market’s success. Instances of money laundering or terrorist financing associated with the property sector could severely damage the city’s image and deter foreign investors. By implementing strong AML/CFT measures, Dubai aims to demonstrate its commitment to upholding international standards and maintaining a clean and transparent property market.

2. Complying with International Standards

In an interconnected world, complying with international AML/CFT standards has become essential. Dubai, being a member of the Financial Action Task Force (FATF), is obligated to adopt and enforce stringent AML/CFT regulations. By doing so, the city aligns itself with the global fight against financial crimes, fostering greater trust among international investors and businesses.

3. Identifying Beneficial Ownership

One of the crucial aspects of AML/CFT measures is the identification of beneficial ownership. This entails knowing the actual individuals behind a legal entity involved in a property transaction. By unveiling the true beneficiaries, authorities can prevent the misuse of shell companies and trusts to conceal illicit funds, making it harder for criminals to exploit the real estate market for money laundering purposes.

4. Enhanced Due Diligence and Reporting

AML/CFT regulations require real estate agents, developers, and financial institutions to perform enhanced due diligence on high-risk customers and transactions. This process involves conducting thorough background checks and documenting the sources of funds used in property transactions. Furthermore, reporting suspicious activities to the appropriate authorities is essential in detecting and preventing potential money laundering and terrorist financing activities.

5. Curbing Speculative Bubbles

Dubai’s real estate market has witnessed periods of rapid price increases, leading to concerns about the formation of speculative bubbles. Money laundering can exacerbate this issue by injecting illicit funds into the market. Implementing AML/CFT measures can help curb speculative behaviors driven by illicit money, ensuring a more stable and sustainable property market.

6. Strengthening Investor Confidence

Investors, both local and international, seek stable and secure environments for their investments. By prioritizing AML/CFT compliance, Dubai can instill confidence in investors, reassuring them that their assets are protected from illicit activities. Strengthening investor confidence can contribute to a steady flow of capital into the real estate sector, promoting long-term growth and development.

As Dubai’s real estate market continues to attract global interest, the importance of robust AML/CFT measures cannot be overstated. By preserving its reputation, complying with international standards, identifying beneficial ownership, enhancing due diligence, and curbing speculative activities, Dubai can build a resilient and transparent property market that will remain a top choice for investors worldwide. As the authorities continue to evolve their AML/CFT strategies, the real estate sector will contribute to Dubai’s economic prosperity while safeguarding its financial system from the threats of money laundering and terrorist financing.

The real estate sector plays a crucial role in the economic growth and development of Dubai. As the emirate continues to attract local and international investors, it becomes increasingly important to ensure the integrity of its property market. Recognizing the potential risks of money laundering and terrorist financing, Dubai has taken significant measures to combat these threats through robust Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations. In this blog, we will explore the importance of AML/CFT in the real estate sector in Dubai and the initiatives implemented to safeguard the industry.

Understanding AML/CFT

AML refers to the legal and regulatory framework designed to detect and prevent the conversion of illicitly obtained funds into legitimate assets. CFT aims to disrupt the financial support provided to terrorist organizations or activities. Both AML and CFT measures are vital for maintaining the integrity and stability of the financial system and protecting it from criminal activities.

AML/CFT in the Real Estate Sector

Dubai’s real estate sector is a key target for money laundering due to its high-value transactions and the potential for anonymity. To counter this, Dubai has implemented a comprehensive AML/CFT framework specific to the real estate industry. The regulatory authorities, including the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA), actively collaborate to enforce and monitor compliance with these regulations.

Key Initiatives and Regulations

1. Enhanced Customer Due Diligence (EDD): The real estate industry in Dubai is required to conduct thorough due diligence on customers, including buyers, sellers, and intermediaries. This includes verifying their identities, and source of funds, and assessing the risk associated with the transaction.
2. Know Your Customer (KYC): The KYC process requires real estate professionals to gather comprehensive information about their customers, including beneficial ownership details, to ensure transparency and prevent misuse of the property market for illicit purposes.
3. Reporting Suspicious Transactions: Real estate professionals have an obligation to report any suspicious transactions or activities that raise concerns regarding money laundering or terrorist financing. This timely reporting enables authorities to investigate and take necessary action.
4. AML/CFT Compliance Officers: Designated compliance officers within real estate companies are responsible for overseeing and implementing AML/CFT measures. They ensure adherence to regulations, provide training to staff, and foster a culture of compliance within the organization.
5. Cooperation with International Bodies: Dubai actively collaborates with international organizations and financial intelligence units to share information, exchange best practices, and stay updated on global AML/CFT developments. This cooperation strengthens the effectiveness of Dubai’s AML/CFT regime and contributes to the global fight against financial crimes.

Benefits and Future Outlook

The AML/CFT measures implemented in Dubai’s real estate sector bring several benefits. They enhance the transparency of property transactions, increase investor confidence, and safeguard the industry’s reputation. By mitigating the risks of money laundering and terrorist financing, Dubai aims to attract reputable investors and maintain a secure and trusted property market.

Looking ahead, Dubai continues to strengthen its AML/CFT framework through ongoing monitoring, evaluation, and periodic updates to align with international standards. Authorities remain committed to adapting to emerging risks and employing innovative technologies to enhance effectiveness and efficiency in combating financial crimes.

Dubai’s inauguration of the fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park marks a significant milestone in the city’s commitment to renewable energy and sustainability. Here are some key points about the project:

1. Largest single-site solar park: The Mohammed bin Rashid Al Maktoum Solar Park aims to become the largest single-site solar park in the world with a planned capacity of 5,000 megawatts (MW) by 2030.
2. Capacity and clean energy generation: The fifth phase of the project has a capacity of 900 MW and is expected to provide clean energy to approximately 270,000 residences in Dubai. It will contribute to reducing carbon emissions by 1.18 million tonnes annually.
3. Implementation model and partnership: The project follows the Independent Power Producer (IPP) model, with Dubai Electricity and Water Authority (DEWA) holding a 60% stake and a consortium led by ACWA Power and Gulf Investment Corporation owning 40% through Shuaa Energy 3.
4. Lowest bid and record-breaking cost: DEWA achieved a world record by receiving the lowest bid of $1.6953 cents per kilowatt hour (kWh) for the fifth phase, showcasing the competitiveness and cost-efficiency of the project.
5. Previous phases and project company: ACWA Power has previously worked on the second and fourth phases of the solar park, highlighting its involvement in Dubai’s renewable energy initiatives. DEWA and ACWA Power formed a project company called Noor Energy 1 for the design, construction, and operation of the 950MW fourth phase.
6. AI-based cleaning system: The fifth phase of the solar park is one of the first projects in the Middle East to incorporate Artificial Intelligence (AI) in an advanced robotic cleaning system for the operation and maintenance of photovoltaic panels.
7. Impact and future goals: The Mohammed bin Rashid Al Maktoum Solar Park, with a total investment of AED 50 billion, aims to reduce 6.5 million tonnes of carbon emissions annually upon completion. Dubai has set ambitious targets of generating 25% of its energy from renewable sources by 2030 and 100% by 2050 in alignment with the UAE’s broader vision.

The project underscores Dubai’s commitment to renewable energy, sustainability, and reducing carbon emissions, contributing to the city’s efforts to achieve its long-term environmental goals.