A supplementary of 30,000 new residential units must be constructed through to 2018 to maintain rent stability in the Dubai according to a study released by an advisory firm specializing in real estate in the UAE
The findings state that although housing sales prices and leases remain high during the second quarter of this year there was a noticeable decline in the growth rate for both sale prices and lease rates. The first six weeks of the third quarter of 2014 also showed that nominal prices for single family homes dropped by 4% while apartments went down by 0.6%.
Dubai still has plenty of residential development opportunities and the market would benefit immensely from developer interest, mostly in the most under-supplied assets. The middle income housing could be a substantial and potent catalyst which could lead to the reactivation of another 15,000 units from delayed projects.
Dubai’s property sector is expected to show unpredictability which could lead to a price correction after a two-year period of positive and lively investor response. Long term capital escalation due to strong demographics is a predictable situation but the current supply trends and affordability limitation will pose challenges to unrelenting long term growth.
Dubai was at the 13th place for the best performing real estate market as said by the property consultancy, a sharp fall from previous quarters when the emirate has featured in the top two positions.