Bottom out? Not for a while yet
Experts were predicting that Dubai’s property market would level off around the end of this year, but with new supply coming online the bottom looks a long way off.
December 16, 2010 2:18 by Samuel Potter
Depending on your point of view, this will either be good news or bad news. If you are in the real estate business or a property owner in Dubai, it will likely be bad news. If you are a resident in Dubai renting, it is good news: We aren’t at the bottom of the market yet.
Gulf News reports that around 48,000 homes will come on line in the next two years, a figure that amounts to 12 percent of existing supply. That’s according to Jesse Downs, research director at Landmark.
Richard Paul, associate director at Cluttons, told the paper: “There is still no parity between supply and demand. You’re looking at a good two years” for the market to reach bottom, he said.
Two years? Ouch. That’s a far cry from what we were told just weeks ago by the chairman of Emaar Properties. Emirates 24-7 reported Ali Alabbar’s remarks at a conference in Dubai where he said the real estate market had “bottomed out without a doubt.” He said that oversupply was expected to clear over the next 20 months, and basically everything was going to be hunky dory. “We’re still going through challenging times,” Alabbar said. “The market has to manage itself. It’s all about confidence. When demand comes, the market will naturally balance itself and this will bring confidence to investors.”
Dubailand is the focal point of the coming supply, apparently, containing 25 percent of the total new supply pipeline, according to Emirates 24-7. It’s making Dubailand an attractive place to live, as rents are so low. Better Homes told the paper that studio apartments start at AED 22,000, while a one bed could be acquired for as little as AED 35,000 for the year. Two beds start at AED45,000, and three beds AED 90,000.
Darius Gamba, Senior Sales & Leasing Consultant at Better Homes, says, “Tenants indeed are moving into these areas despite the infrastructure, transportation and community centres not being ready. The reason being: the units are spacious, quality construction and offer good value for money.”
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