Not the Jobs who sadly left us too early, but employment. Various recent studies have pointed out how employment in the region and particularly the Middle East is on the rise. According to findings released by The Monster Employment Index (monster), Middle East online recruitment in September escalated to its highest levels in the past 12 months.
The findings of the index show that major economies like KSA, UAE and Qatar showed ongoing positive momentum in hiring trends in sectors like retail trade, logistics and their related occupation groups like finance and accounting.
What does this have to do with real-estate?
Increase in job opportunity has a direct impact on the demand for real-estate. One of the reasons why companies are able to attract more talent to the region is because accommodation costs are now affordable. New expatriate workers who had previously found it hard to save in the region because of rising cost of housing, now have a wide variety of options available.
Adding to this is the easier terms for buyers and leasers from banks and real-estate agencies. What was previously thought of as a hassle or nightmare – finding decent accommodation – has now become simple. Government authorities such as RERA in Dubai have also brought more transparency into the paperwork of how contracts are drawn up and implemented. Resident’s associations are becoming more vocal and are monitoring their expenses to keep maintenance costs low. All these factors are bringing in a new found momentum to the real-estate sector.
Sure, there might be some of you out there thinking, “This guy is in the real estate business, he will link anything to show demand is rising”. So don’t just take my word for it. This is what the California State University Fullerton, has to say about this.
Researchers Youguo Liang and Willard McIntosh found that, “Employment growth contributes to property markets return in the short run.”
If employment keeps rising, growth will rise too. In a highly expatriate employment driven market like ours, this has a huge impact on real-estate markets.
On occupation six-month trends, Monster survey shows that critical areas such as healthcare (up three per cent) have been registering successive month-on-month growth since June ’11. We still have a long way to go before we reach the pre 2008 growth levels but we have certainly crossed the dip.
Adding to this, the UAE improved its global ranking by two to reach 33 this year in the World Bank’s annual Doing Business report. The new report by the World Bank and the International Finance Corporation (IFC) — Doing Business 2012: Doing Business in a More Transparent World — assesses regulations affecting domestic firms in 183 economies. The report finds that 11 out of 18 economies in the Middle East and North Africa improved regulations for entrepreneurs in the past year, despite political and economic uncertainty in the region.
The danger of being optimistic is that unlike a pessimist you don’t get the luxury of being pleasantly proved wrong. But it’s one risk I’m willing to take. 2008 was a long time ago, jobs and low costs are bringing in more people and this will fuel more demand. And this time we are better prepared to manage our real-estate market.
Kabir Mulchandani
Dubai-UAE