Dubai will absorb 42,000 new properties (excluding those in Remraam) this year. This is on top of the 30,143 units delivered through the whole of 2019. Gulf News reports this is more than enough to ensure property prices and rental values continue to remain under pressure.
This will also be the top priority for Dubai’s Higher Committee on Real Estate, which will come up with guidelines on optimum ways to manage future demand and supply.
For now, Dubai will have to factor in how best to deal with imminent supply.
Less is good
From a wider market perspective, having to deal with far fewer new home completions will be a good thing for Dubai real estate and its investors. Piling on more pressure from supply – especially when many worry about oversupply – would not have helped anyone in terms of price stability.
Based on data, sourced from Land Department transactions, there were 32,106 units ready in Dubai last year. There were further 67,133 units that were supposed to have been completed during the period … but didn’t make the cut.
The next few days will see more reports coming out on 2019 property transactions in Dubai. Market sources have been insistent that these need to be verifiable and stripped off any hype.
Ready vs. off-plan
In the last two years, Dubai developers have done well for themselves using post-handover payment plans of three-five years and even longer, as well as offer direct financing for buyers. This explains off-plan’s dominance during this period, and why the demand for ready was so muted.
In 2017 and 2018, 86,241 new homes were launched as off-plan, with most of their completions scheduled from mid-2020 onwards.
THREE PROSPECTIVE BUSY SPOTS FOR INVESTORS
According to Naval Vohra, CEO at Appello Real Estate, investors wanting to look beyond Dubai’s established locations should head their way to these three emerging destinations:
“It seems to be able to weather any market dips. Dubai Hills Estate fared well across all price points – no matter what the market fluctuations in 2019 – and has been a popular for both investors and end-users.”
“It has suddenly come alive thanks to new hotel launches. It took a while, but a raft of new launches means it’s going to appeal to a wider demographic and pull in the crowds – not least because of the first Caesars Palace hotels in the Middle East.”
“People love living by the water – it’s a fact. And just a short drive from Downtown Dubai. Investors should look here because market trends show that waterfront properties are a great point of investment in Dubai, so even if you want to move out of your waterfront house after a while, you can lease out the property and receive a high return on investment.”
Source: Gulf News