Business | Property
No rent relief in 2007
Ask property analysts how many residential and commercial units will hit the Dubai market in 2007 and you will most likely receive wildly differing answers - most will admit that they just don't know.
- By Robert Ditcham, Staff Reporter
- Published: 23:36 May 3, 2009
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- A study by branding company Future Brands estimates that Dubai's housing supply will more than double by 2025 to 600,000 units - almost enough to house the entire population of Kuwait.
Dubai: Ask property analysts how many residential and commercial units will hit the Dubai market in 2007 and you will most likely receive wildly differing answers - most will admit that they just don't know.
A study by branding company Future Brands estimates that Dubai's housing supply will more than double by 2025 to 600,000 units - almost enough to house the entire population of Kuwait.
But continuing construction delays among major projects have made accurate predictions of next year's expected supply close to impossible. The factor has quietened talk of a supply-led stabilisation in rental prices.
"We should be more cognisant of the time it takes to deliver here," said Elaine Jones, CEO of Dubai-based property management company Asteco.
"Asteco has done a number of projections of a certain number of units that will be completed between 2005 and 2010, but the reality is that the build-up plan is proving to be much longer than we had projected. Whereas I had anticipated an oversupply now, that is certainly not the case. There will be a time when there is an oversupply versus demand, but I think that if the bubble is going to burst, it's going to take much longer than we had originally anticipated."
One project which analysts had expected to help meet demand levels was the first phase of Nakheel's Palm Jumeirah. Despite being slated for completion in 2006, Nakheel says it will hand over the 4,000 luxury villas and apartments by August 2007.
Projects
Nakheel also intends to complete full handover of International City, a project made up of 6,500 units in four main districts including the Central District, Residential District, Lake District and Forbidden City.
The company also hopes to deliver the first phase of Jumeirah Golf Estate in the last quarter of 2007, which includes the Greg Norman-designed Fire and Earth courses.
Dubai Properties, another of the big three property developers, recently said it would hand over the Jumeirah Beach Residence project in the first quarter of next year. The 2,500 units were scheduled to be delivered by the end of this year but a series of adjustments to the infrastructure plan has put back delivery.
The first phase of Dubai Sports City in Dubailand is also set for a late 2007 delivery date.
It will include an Ernie Els-designed golf course and various sports academies, as well as the opening phase of the Victory Heights residential community.
ETA Star, a Dubai-based private developer, will hand over the Dh400 million Palladiam Towers in the first quarter of 2007. The mixed-use project in Business Bay will bring 210 residential and 100 commercial units onto the market.
Damac Properties, Dubai's largest private developer, says it will complete its Lake Terrace and Lake Views towers in the Jumeirah Lake Towers master development, bringing a combined 1,100 units onto the market.
Demand
"Next year's residential supply will be mostly absorbed by the existing demand, reducing potential for over supply. The scenario holds true for the commercial property market also," said Peter Riddoch, CEO at Damac Properties.
Meanwhile, private developer Tameer says it will deliver the Al Dana 1 and Al Dana 2 projects in International City within the first quarter of 2007. It also aims to complete Al Shahd Tower in Emirate Hills by March 2007 and Al Jawza tower in International City by December 2007.
"The amount of new projects coming onto the market next year, especially in the Al Barsha area, is a good thing for the market," said Ryan Mahoney, managing director of Dubai-based real estate agency Better Homes. "It will go towards absorbing some demand for short term rental units, especially from people who are currently sharing accommodation."
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