One of the Dubai’s leading developers CEO, Ziad El Chaar has questioned leading consultancies’ forecasts for Dubai property market, saying they not always match real numbers and can confuse potential investors.
Ziad El Chaar said that property prices are often heading up or down driven by leading analysts’ market researches, while those prognoses themselves are based on a one-sided and often unreliable information.
However, a brief glance at a history of forecasts gives reason to believe that hypothetical figures are rarely confirmed by reality. For example, out of 25,000 new property units, predicted by analysts to come to Dubai market this year, no more than 10,000 units will be set to handover, said El Chaar. These data were gathered based on the Damac portfolio, which is set to deliver about 2000-2500 units in 2015, and Emaar’s activity analysis, which is going to add no more than 800 new units to Dubai residential stock. And these two developers make up over 50 percent of all the current inventory handovers in Dubai, therefore the forecast for 25,000 new units can hardly be considered real.
El Chaar also stressed that, according to the Dubai Statistics Centre, Dubai's annual population growth in the coming years will be 5-7%, and the housing stock is now increasing by 2.2% pa, so there is no chance for the property oversupply in Dubai. 160,000 new residents will come to Dubai next year, and another 170,000 will come a year after. And all these people will have to live somewhere, which means that the demand for rents will also stay high.
This is also confirmed by the fact that such Dubai areas like Dubai Marina, JLT and Burj Area are generally not subject to reduction in demand, which is recognized by all analysts. Therefore, El Chaar advises using analytical reports data for reference only, without making any general conclusions based on these.