Dubai: Constructing new homes by private developers in the UAE fell during the fourth quarter of 2020, while the fall in government-sponsored infrastructure projects proved less of a concern for the construction sector.
Even non-residential projects from the private sector were in decline from October to the end of December, as per the RICS Construction Activity Index for the UAE. (RICS is the UK-based Royal Institution for Chartered Surveyors.)
The financial restriction remains the biggest restriction in restraining construction activity, with 81 percent of respondents in the RICS survey citing the reason. Competition and inadequate demand are also the “main factors holding back activity”.
Industry sources now hope that government-led projects will further bring the way into boosting fortunes, mainly in the final stretch guiding to the Expo in Dubai, which is dated to start from October. But for a whole recovery, private sector activity also needs recovering up.
More jobs at risk
Industry sources expect duty on private residential and private non-residential to fall through this year, and also is counting on the same for the headcount and also for profit margin.
- In the RICS analysis, a net balance of -53% of respondents in UAE said their working pressures on private residential and private non-residential decreases in the final three months of 2020;
- A net total of -28% saw a fall in infrastructure workloads.
- Respondents saw an increase in workloads from telecom/tech-driven projects and in the energy sector, but a drop in transport.
Government leads
This is true across countries. “With infrastructure a key driver in leading this bounce back, greater government spending will be vital,” said Sean Ellison, Senior Economist at RICS. “Many governments have committed to substantial infrastructure spending, bringing forward shovel-ready projects and we can expect more fiscal stimulus.
“How effectively this capital is put to use will dictate the speed of our recovery.”
Tread carefully on new projects
In accordance with the feedback from private developers, their focus will be on price savings and construct to want. It will be sometime earlier off-plan sales recover fully in Dubai and which implies fewer chances of new launches – and more construction – happening.