Residential property demand in Dubai will remain substantially strong over the next two decades as the emirate will almost require double of its existing supply, thanks to an expected increase in the city’s population, say industry analysts.
According to the Dubai Statistics Centre, the supply of apartments and villas in Dubai stands at 690,498 units as of 2020, catering to 3.4 million population of the city.
Analysts estimate that Dubai will require between 483,000 to 550,000 additional residential units over the next two decades to accommodate 5.4 million people by 2040. This amounts to the need of new units between 24,150 and 27,500 units a year.
Under the 2040 Urban Master Plan launched earlier this month, Dubai’s population is expected to increase from the current 3.4 million to 5.8 million by 2040. The emirate will have five main urban centres, including two new centres.
“Assuming an approximate household size of 4.9 per unit based on the population estimate of 3,411,200 from Dubai statistic centre as of 2020, nearly 483,550 additional units would be required by 2040. To put this in perspective, that is around 24,000 units per year for the next 20 years,” says Prathyusha Gurrapu, Head of Research and Advisory at Core.
“Developing further on strong fundamentals, Dubai’s 2040 Urban Master Plan reinforces Dubai’s competitiveness as a global destination while creating an environment where people from around the world can thrive with sustainability, diversity and inclusiveness as key focus areas,” she added.
Taimur Khan, Associate Partner at Knight Frank, said the quantum of additional supply required over the next two decades is subjective and is very much contingent on a number of quantitative and qualitative factors, some of which will see a marked change over the short to medium term.
“Currently, the total number of residential units in Dubai stands at around 555,000. To service the total expected population level by 2040, we are likely to need this number roughly double,” said Khan.
Knight Frank estimates that the total number of apartment units in Dubai stands at around 472,000.
Khan said developers will have to understand how household incomes will change going forward and what this will in turn mean for demand.
“The likelihood is, whilst there will be a range of opportunities for developers from the affordable to the super-prime segments of the market, the middle-income segment of the market is likely to require the most significant quantum of supply to be delivered,” Khan said.
Copyright © 2021 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).