According to the ‘Property Finder Trends’ report for January-June 2019, the total number dubai property developers of completed residential units included 14,999 apartments, 1,084 serviced apartments and 4,895 villas and townhomes.
Results of being all the property developers are racing against time to complete and handover residential projects despite a sustained correction in prices in Dubai this year as they completed record 20,978 units in first half of 2019.
The report further said that an additional 38,426 residential units within 152 projects across Dubai are expecting to come online this year, as these units were at least 85 per cent completed by the end of July. It said 29,397 apartments, 3,387 villas or townhouses and 5,642 serviced apartments are expected to be done by the end of this year. However, even with a high completion status, not all projects will achieve that this year, going by previous materialization rates.
Dubai property developers responded to a softening in the industry as more supply came online, with many making fundamental changes to their operations this year to boost earnings.
Overall, residential stock in Dubai expected to reach 637,000 units by the end of next year, reflecting an increase of 10 per cent. Experts said a price correction and higher supply will promote Dubai as an affordable market, aside from offering residents and investors an opportunity to bargain a better property deal in one of the most popular and development cities of the world.
Some of the well-known people in the Industry shared their vision and opinion regarding this matter:
Shaher Mousli, chairman of Arthur Mackenzy Properties Group, said the projected supply will surely create a surplus in available stock, which can – and in all probability will – result in an approximately 20 per cent softening in prices.
“The fact that would motivate sales is payment plans and relaxed terms as opposed to the price itself,” he said.
Alan James Gammon, general manager of Samana Developers, said the current real estate market is dominated by news of deliveries as most developers were racing against time to deliver properties in time for Expo 2020 Dubai.
“The current summer lull, we believe that by offering a well-priced quality product it creates a massive opportunity for end-users who were unable to join the property market due too previously high prices, as well as investors who might opt for large block-buying for higher returns due to the attractive return options,” he said.
Gammon said there is a strong indication that the real estate market will continue to grow due to attractive pricing and payment plans, which will encourage middle-income families to buy homes for the first time. Families with stable jobs and steady incomes are expected to continue to enter the market to take advantage of market conditions, he added.
“We are firm believers in the long-term sustainability of the UAE’s real estate market. That’s why we entered the market when many people started doubting it,” he added.
Lynnette Abad, director of data and research at Property Finder, said increased residential supply bodes well for residents, as they will continue to have more leeway to negotiate prices in the rental market.
“With a record number of units expected for the second half of the year, we can expect prices to decline further as the market continues to absorb these units,” she said.
For the sales market, Abad said an influx of new supply, without being outstripped by demand, would continue to make the city more affordable for both residents as well as investors.
The report said 33,982 residential units were under construction in Dubai last year with a completion status of at least 65 per cent scheduled for 2019.
“Less than a few thousand of those units ended up completed by the end of 2018, and most were pushed to 2019. With nearly 20,000 already completed in the first half of 2019, and another 38,426 with a status of at least 85 per cent complete, the market is set for some record numbers in completions,” the report said.
Atif Rahman, director and partner at Danube Properties, said the Dubai property developers economy has the power to absorb the controlled supply that continues to add to the current inventory as the emirate continues to attract property buyers.
“Besides, the current price and rent status make properties a very lucrative for investment and we expect massive investment in real estate in the next few months and years,” he said.
He said the announcement of Berkshire Hathaway entering Dubai is another evidence of how seriously global real estate expert feel about Dubai’s realty industry.
“In addition to that, a large number of end-users with stable jobs – who were priced out previously – are now finding the current prices lucrative and entering the market for the first time. Once this trend catches up, the trend will push up the demand high.”
If investors spend time to shop around and commit to serious developers who can provide easier ownership options, deliver finished products and provide the support required post-ownership, then it is worth investing.
Moreover, addition, the end to the current soft cycle will come with the easing of mortgage requirements concludes Farooq.
Buyers are not getting adequate mortgage finance from banks. If the developers offer a convenient payment plan for buyers, with the help of financial institutions or banks, we believe the region’s real estate market will witness an unprecedented boom and become economically sustainable.