Housing supply may dip ahead of World Expo 2020
After a brief period of stabilization, the housing market in Dubai may see a shortfall of supply in 2020, as the World Expo approaches, said an expert.
Dubai may be in need of low-end and ultra-luxury properties to cope with the housing demand in the next five years, pointed out Jesse Downs, the Managing Director, Phidar Advisory, who was speaking at the Destination Dubai 2020 Conference.
For instance, the most undersupplied segment is the housing sector, with monthly housing spend of Dh.3000 to Dh.5500. There could be property investment opportunities at the lower-end and very pinnacle of the market. There is considerable shortfall, and an additional undersupply by 2020, Downs stated.
In the fourth quarter of 2014, the selling prices of nominal apartments declined 3.3 percent in comparison to previous quarter, while there was 0.9 percent decrease in nominal single family homes quarter-on-quarter.
Global real estate consultancy Jones Lang LaSalle said that a total of 25,000 housing units would be added to Dubai market this year, and this may be sufficient for short-term. But experts at Destination Dubai 2020 are of the opinion that emirate would require considerable new developments to receive the 25 million tourists during the expo.
The expo will run for a six month period, beginning 20th October and will extend into April 2021. The economic activity associated with expo is likely to generate about 270,000 new jobs.
The real estate analyst, Franck Delage, at ratings agency S&P, said that the real estate market in Dubai was equipped for long-term stable growth than it had been in the past as there are more regulations in place now to reduce risks.
Overall, the ratings agency has given Dubai real estate a stable outlook and the rating is unlikely to change over the next 12 months, Delage said.
