Conditions in the real estate sector remained testing as the market tussled with the impact of the traditional summer dip, and the modest pace of economic recovery both locally and globally.
A strong oil sector driven by a sustained period of high pricing has once again provided the impetus for further public spending in the UAE.
A similar situation has also been apparent regionally as governments try to curb the negative impacts of social unrest that have emerged against the backdrop of the ‘Arab Spring’.
Prices for Dubai Fateh Crude Oil during the quarter hovered around US$105/per barrel with yearly prices typically ranging from US$100-$120 per barrel.
The impact of reduced output from Libya has been a key factor in supporting prices, with this uncertainty effectively supporting the coffers of the UAE and other oil producing countries in the Gulf.
Amidst a prolonged period of strong oil industry revenue, the Abu Dhabi government contimues to invest heavily in economic diversification.
This is particularly evident in the industrial sector with the ongoing development of Khalifa Port and the Khalifa Industrial Zone (KIZAD).
The 417 square kilometre scheme, envisaged to become operational by the end of 2012, will become the focal point for Abu Dhabi's manufacturing, logistics and trade related sectors.
The UAE economy is anticipated to expand further during 2011 with various government and non-government agencies forecasting over 3% growth.
The IMF also revised their growth forecast of 3.3% to 3.8% . Non-oil sectors continue to perform well, with contribution to GDP estimated to reach 3.3% from circa 2.1% in 2010.
Further positive performances from the tourism, hospitality, retail and other service related sectors are also expected to soften the impact of slowdowns felt in other local economic areas.
The Global Competitiveness Report 2011-2012 has ranked the UAE the 27th most competitive country globally, down two places from the previous year.
However, amidst challenging conditions regionally, the country does continue to demonstrate a high level of competitiveness in areas such as public spending on infrastructure, technology readiness and overall macroeconomic stability.
With the health of the global economy looking more uncertain by the day, public spending through infrastructure development, improvements in social services and other public facilities will remain vital in fuelling economic activities.
Large-scale projects such as Etihad Rail, the development of nuclear power plants, and expansion of road networks will all have major direct and indirect impacts on demand for real estate, whether it be residential, educational, commercial offices, healthcare or hospitality.