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ValuStrat, a regional consulting group, said recently in its report that the total number of housing units planned to be completed in Dubai within 3-5 years is 133,000.
Of the total number of properties, 57% are located in (, Arjan, Town Square, , etc.), (Meydan One, , , etc.), , and .
However, the developers’ promise to deliver at least 340 real estate projects, which include 90,000 housing units scheduled for completion in 2020, is yet to be kept, which would be rather hard given the traditional delays in construction, the inevitability of which has been evidenced in the last five years, the ValuStrat report says.
ValuStrat experts attribute the double-digit growth in residential and in Dubai in the Q4 2019 not to the actual growth in demand, but only to the underestimated forecast for the number of offers at the end of the year, the report says.
“In terms of the transactions volume, sales of ready residential real estate units in the fourth quarter of 2019 increased by 29.7 per cent year-on-year and by 1.9 per cent in a quarter, while increased by 68.3 per cent annually and by 33.1 per cent per quarter,”said Haider Tuaima, Head of Real Estate Research at ValuStrat.
“Sales of office real estate increased by 2.5 per cent in a year and by 87.6 per cent in a quarter,” Tuaima added.
These trends are likely to continue in the current year, which will lead to a potential increase in real estate transactions.
“Sales are expected to continue growing in 2020,” Tuaima said.
According to the forecast for the previous year of 2019, the share of residential real estate units in the total supply of ready housing was to be 58 per cent, while the total number of residential real estate delivered at the end of the year was, actually, 24 613 units, of which 19 505 were apartments and 5 108 were villas/townhouses.
The report also said that more than half of the new home supply in 2019 was concentrated in four areas of Dubai: Dubailand, Jumeirah Village Circle, Dubai Marina and Mohammed Bin Rashid City.
At the same time, the ValuStrat Real Estate Price Index (VPI), which tracks changes in capital cost for a representative fixed basket of real estate units, fell by 10.4 per cent for residential real estate in 2019, while a decrease in the 4th quarter was 2.5 per cent.
As for the , the average annual rent in Dubai was AED87,961 (US$23,947), with the average rental rate for apartments being AED67,944 (US$18,500), and for villas — AED210,918 (US$57,411).
“Rents are expected to decline in 2020 in areas where new projects will be delivered,” Tuaima said.
And finally, in 2019, the construction of approximately 238,871 square meters of growth leasable area (GLA) of office space was also completed. According to a ValuStrat report, some 357,271 square meters of office space, scheduled for completion in 2020, are also being built in Dubai.
As for the office rents, the average city asking rent for a typical office is now about AED910 (US$248) per square meter, and the occupancy of office space in Dubai is currently at 83 per cent level.
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