Cityscape begins with developers and investors adjusting to a reshaped property market

The event is being held at the Dubai World Trade Centre on November 16 and 17

In this April 6, 2020, file photo, a lone taxi cab drives over a highway in front of the Dubai skyline. The United Arab Emirates announced on Saturday a major overhaul of the country’s Islamic personal laws, allowing unmarried couples to cohabitate, loosening alcohol restrictions and criminalizing so-called “honor killings.” (AP Photo/Jon Gambrel, File)

Cityscape Global, the region's biggest property event, will begin in Dubai on Monday amid challenging market conditions in the wake of the Covid-19 pandemic.

The event, which in the past was seen as a bellwether for the region's property market, is being held this year against a volatile global economic backdrop.

The event, taking place at the Dubai World Trade Centre on November 16 and 17, will examine the current state of the emirate's real estate sector, as developers adapt to a reshaped market and investors look towards next year's Expo 2020 to give the market a boost.

The pandemic has hurt the real estate sector, exposing challenges, but it has also presented opportunities, according to Pierfrancesco Rocca, a junior partner at McKinsey Middle East.

“While market actors wrestle with the short-term threats, it is critical to take a step back and take a fresh look at real estate as an investment class.”

Covid-19, which has infected more than 54 million people globally and caused more than 1.3 million deaths, has tipped the economy into its worst recession since the 1930s. The International Monetary Fund expects global output to shrink by 4.4 per cent this year and recover only modestly in 2021.

The real estate sector is a vital contributor to Dubai's economy. It accounted for 7.2 per cent of the emirate's gross domestic product last year and created added value of more than Dh29.4bn, up 3.3 per cent on 2018 compared to 2018, according to a Dubai Land Department report released on Saturday.

The value of real estate transactions in 2019 rose 2.1 per cent annually to Dh221bn, propelled by an increase in transactions and mortgages. The value of real estate sales climbed 5 per cent to Dh81bn, while real estate mortgage values were up 4 per cent to Dh125bn, the DLD's report said.

Transactions continued to increase in the first quarter, with sales rising 5 per cent to Dh21bn. The pandemic slowed activity dramatically in the second quarter, with transactions falling by 41 per cent on the prior year. But they rebounded in the third quarter, jumping 65 per cent on the second quarter to Dh18.15bn.

The number of deals during the quarter climbed more than 55 per cent to 8,675, according to listings portal Property Finder, which helps compile the emirate’s real estate index with the DLD.

However, despite the increase in transaction activity, prices remain subdued due to ongoing oversupply fears. Average sale prices were 9 per cent lower in the third quarter than in the same period last year, according to JLL.

The challenges and opportunities faced by the region's property sector will form the focus of Cityscape’s Real Estate Summit taking place on Monday.

Investors and developers will hear from top Dubai government officials including Sultan bin Mejren, director general of the DLD; Helal Saeed Al Marri, director general of the Department of Tourism and Commerce Marketing; and Sami Al Qamzi, director general of the Department of Economic Development.