The timing of the price increase has added extra pressure on the traders and end-users, making end-products more expensive at a very crucial time. This whole thing had a cascading effect.Īs a result, end-users are paying more for the same quantity – at a time when, money is hard to come by. The empty containers were not coming back to China. But due to COVID, the loaded containers were stuck and started piling in ports of US and other countries as rail and road networks were not functioning. So, the supply-side issues including the shortage of resources constrained the production and shipment that pushed up the prices. So, when demand started to pick up from November- December, 2020, the factories weren’t ready to supply due to worker shortage or shortage of resources, including raw materials, capital, etc. The lockdown saw a large number of materials stockpiles stuck at the warehouses, that had exhausted over the last 7-8 months. However, the real reason is that due to complete shutdown of the factories following the complete lockdown in China, India and other countries – from March to June 2020, the workers had either left the area or relocated to other places. One of the reasons is that the demand for raw materials in China and India went up after the factories opened post the COVID lockdown. To add salt to injury, the freight rates have also increased manifolds, in some cases from US1,000 to US4,000 a container. Steel prices, for example, have gone up from Dh1,800 to Dh2,600 per tonne while the price of white wood jumped from Dh600 to Dh1,000. Prices of almost all building materials products have gone up by 25 to 30 percent in the UAE and GCC. However, there is a reason behind the spike. It might surprise many industry observers as the change in the demand-side situation doesn’t justify the increase in price. We have seen how Covid-19 has forced repeated lockdowns in different countries with a travel ban, and restrictions on people’s movement,” he said.Prices of building material have increased suddenly in recent months that has created a temporary hiccup in the market. “People felt safe in the UAE – in an ‘unsafe’ world. As a result, we have seen how foreign businessmen and professionals started to invest in the UAE, relocate their families and set up businesses – which helped boost the real estate sector as well as economic activities,” he said.
“The UAE stood as a safe country to live in during the pandemic. Sajan also said that the Covid-19 pandemic has demonstrated the UAE’s strong leadership in managing the pandemic, and creating a safe haven for people – while the rest of the world was reeling from the crisis. The recent liberalisation of the business licensing regime, and immigration reforms, have further shown the UAE’s strong drive to attract investors,” he said.
“Dubai’s unique advantages – quality of life, safety, security, world-class infrastructure, international connectivity, and the country’s leadership in combatting the Covid-19 pandemic – have all helped more and more wealthy people to consider Dubai for investment and relocation. The question one would ask is how can an industry record such a high growth in one year?” Sajan told Khaleej Times. “The fast recovery from the pandemic, and healthy growth, reflects the long-term sustainability of the real estate sector of Dubai, and also shows its degree of maturity.
#Rizwan sajan full#
It was not only the year of full recovery from the Covid-19 pandemic, but also a year of return to healthy and sustained growth. Rizwan Sajan, founder and chairman of Danube Group, said that the real estate sector in Dubai saw one of the best years in its history in 2021.
Referring to the latest data released by the Dubai Land Department, they said that the emirate has already registered sales transactions worth Dh142.5 billion through more than 57,500 deals by mid December.Ī total of 35,434 transactions worth Dh72.49 billion were registered last year. Dubai’s real estate market will post more than 100 per cent growth in the transaction value this year, as investors reposed trust in the emirate’s consistent economic policies, successful strategy to handle the Covid-19 pandemic, visa reforms, and the recent liberalisation of the business licensing regime, experts say.Īnalysts, industry specialists, and top executives, said that the emirate is expected to record property sales transactions worth over Dh150 billion this year, compared to Dh72.49 billion in 2020.
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