A line up of residential units is waiting to be completed in Dubai over the next couple of years.
133,000 residential units are known to be under construction in Dubai and expected to be completed in 3 to 5 years, ValuStrat, a regional consulting group said.
Out of the total number of units, 57 percent are in Dubai Land (Akoya Oxygen, Arjan, Town Square, Damac Hills, etc.), MBR City (Meydan One, Dubai Hills Estate, Sobha Hartland, etc.), Jumeirah Village Circle, Downtown Dubai and Business Bay.
Developers’ promise to handover no less than 340 projects totalling 90,000 units in 2020 remains to be realised, given delays in construction as evidenced during the last five years, ValuStrat, said.
Dubai reported a double-digit growth in residential and office sales during the fourth quarter of 2019 as actual end of year supply was less than expected, a report by the consulting group showed.
“In terms of transactions volume, Q4 2019 residential ready homes cash sales grew 29.7 percent annually and 1.9 percent quarterly, while off-plan sales grew 68.3 percent annually and 33.1 percent quarterly,” Haider Tuaima, Head of Real Estate Research at ValuStrat told Zawya.
“Office unit cash sales grew 2.5 percent annually and 87.6 percent quarterly,” Tuaima added.
The trend is likely to continue this year resulting in a potential increase in real estate transactions.
“Sales volumes in 2020 are expected to witness continued growth,” Tuaima said.
Residential supply represented only 58 percent of projections in 2019, as total completions reached 24,613, with 19,505 apartments and 5,108 villas/townhouses supplied.
More than half of 2019’s new supply was concentrated in four areas: Dubailand, Jumeirah Village Circle, Dubai Marina and Mohammed Bin Rashid City, the report said.
“Lowered borrowing costs, improved product offerings and attractive developer payment plans may all now be creating the right conditions for improved buyer confidence in Dubai’s property market,” Declan King MRICS, MD & Group Head Real Estate at ValuStrat said.
The ValuStrat Price Index (VPI), a valuation-based index that tracks change in capital values for a representative fixed basket of properties, dropped 10.4 percent for residential capital values in 2019, while Q4 declines stood at 2.5 percent.
The Dubai VPI for residential rental values fell 9.1 percent annually and 3.8 percent quarterly. The average residential annual rent in Dubai was at 87,961 UAE dirhams ($23,947), with apartments’ average rent standing at 67,944 UAE dirhams and villas at 210,918 UAE dirhams.
“Rentals (in 2020) are expected to soften in areas where new projects would be handed over,” Tuaima said.
The Dubai VPI office capital values dipped 1.9 percent in Q4 2019, its steepest quarterly decline since Q4 2017.
Construction of an estimated 238,871 sqm gross leasable area (GLA) of office space was completed in 2019. According to the report, available data on remaining office space under construction is estimated at 357,271 sqm GLA, expected to be delivered in 2020.
The citywide median asking rent for a typical office size stood at 910 UAE dirhams per sqm according to ValuStrat. Office occupancy in Dubai was estimated at 83 percent.
(Writing by Gerard Aoun; editing by Seban Scaria)
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