Lookup, a real estate information portal, presented its report on the prospects for the housing market development in Dubai, suggesting that the emirate will become more affordable for real estate buyers and tenants before 2019.
Lookup report forecasts that 45% of the expected housing market supply (nearly 65,000 new housing units) will be handed over during the next 18 months.
Gibran Y Bham, co-founder of Lookup and author of the report, said: "Considering that we are now in more uncertain global economic times and with the Dubai market having slowed considerably since mid-2014, this supply will most definitely put downward pressure on capital and rental values."
But he added: "We believe that this supply will be absorbed, Dubai will become more affordable and thus more competitive and a number of government initiatives will begin to bear fruit in 2017."
Lookup report suggests taking a look at the current year figures and that of 2008 for comparison, when in 2008 the percentage of the future market supply amounted to 332% of the existing stock, whereas today it is just 35% of the current supply. Dubai saw 44,000 new construction project launches since 2012, while 2008 alone saw 47,775 new projects revealed. So it is appropriate to talk about the current healthy market’s self-correction, Y Bham said.
Bham added: "Real estate investors in Dubai of 2015 are not heavily leveraged as in 2008. The steady market correction starting in early 2014 following government policies has allowed investors to divest of excess holdings.
"One of the key reasons that the Dubai market declined in 2008 was the fact that there was an overwhelming amount of projects under-construction and very little ready supply. Panic set in for a variety of reasons but also because Dubai did not have the credibility in 2008 as it does now."