House prices vs oversupply: how much units is being delivered in Dubai?

09.04.2017

A new Core Savills report revealed a number of housing units completed in Q1 in Dubai.

Dubai developers are trying to keep it up with real estate market slightest changes and adapt to its needs in a timely manner, that’s why no oversupply could possibly be expected, says a new report by Core Savills consultancy.

First quarter handovers in Dubai totaled 3100 real estate units, which amounts to only 15 per cent of the overall supply expected in 2017. If this trend continues, only about 15,000 units could possibly enter the market this year in Dubai, which is 50 per cent of the volume announced by the developers.

According to the Dubai Land Department, 80 real estate projects are to be completed this year in Dubai. However, 400 new projects got an approval for development during the first three months of the year.

Most of the first quarter completions were in such Dubai areas like Dubailand and Silicon Oasis (42% of the total new units supply). At the same time, prices for apartments in these areas remain stable due to high demand.

“Apartments in Dubailand and Jumeirah Village have witnessed stable sales prices as low to mid-income occupiers are willing to trade connectivity for newer, better build, and value-for-money products in these fringe areas,” said David Godchaux, CEO of Core Savills.

In other respects, prices in Dubai property market are controlled through competition between complete and off-plan segments, with the latter often providing more competitive prices. In some areas, like Downtown, this resulted in 112% increase in the number of off-plan transactions year-on-year.

The only one Dubai area to resist the overall tendency is Dubai Marina. While recording the highest gain in off-plan deals, sales prices for the new projects were actually marginally higher than the area average due to the “premium lifestyle offerings and build quality,” Core Savills reports.

“This led many buyers to lock in early-bird incentives, resulting in a sentimental boost for the overall district with average sales prices stabilizing and starting to show early signs of recovery,” the report says.

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