A detailed annual report on Dubai housing market by a leading real estate consultancy Asteco, giving also a reasonable forecast for the current year, was published recently.
According to this report, 13,500 apartments and 800 villas were handed over in Dubai in 2015. It is expected that this year Dubai residential stock will have another 22,000 apartments and 7700 villas, including 500 villas in a Living Legends community in Dubailand and 506 apartments at a much-delayed Marina 101 development, which is finally to be completed in 2016. However, this amount will depend on individual decisions by Dubai developers, who can decide to postpone some projects’ handover, so as not to oversupply the market, says Asteco.
High-end luxury residential market in Dubai, however, can still see the supply overrate demand with a continued pressure on property prices. Rentals may also see some decrease while a lot of tenants moving back to Dubai from more affordable northern emirates of Sharjah and Ajman.
Affordable housing sector is expected to see an upturn in 2016, says Asteco. Demand for apartments in this market segment is expected to increase both in the sales and rental sectors, especially when construction activity for infrastructure projects related to Expo 2020 ramps up in the medium run,
End-users, rather than investors, will be the predominant type of property buyers, especially in the villas and townhouses sales sector, with a clear preference for small three to four bedroom houses in such areas as Mudon and Arabian Ranches Phase 2, where it is possible to buy better-priced yet good quality alternative property.
"However, if we look to the medium and long-term, the outlook is more positive with demand more than likely to grow in line with the progress of key infrastructure projects currently underway, such as Dubai World Central Airport and Expo 2020," said John Stevens, Managing Director, Asteco.