Dubai: As the overall residential market in Dubai recorded a slight increase in supply in the second quarter of 2012, limited new office supply entered the market over the first half of the year, according to the latest report by Jones Lang LaSalle (JLL).
In its latest Dubai Real Estate Market Overview, the consultancy reveals that around 3,000 units were added to Dubai’s residential stock inventory in the second quarter of the year, bringing the current residential stock in Dubai up to approximately 344,000 units, with villas continuing to outperform the apartment sector.
The future supply in the period 2012-2014 is expected to total 41,000 units, according to the report.
“Prime residential buildings have been witnessing a rise in prices due to the increased demand. The economy growth has caused more jobs to be offered and banks to become more generous, with low costs of bank loans,” Craig Plumb, the head of Research at Jones Lang LaSalle, told Gulf News.
Meanwhile, Dubai office stock will see an estimated 1.4 million square meters of new office space being added between 2012 and 2013 to the existing stock of 6.1 million square metres, the report points out. It added that limited new office supply has been entering the market over the first half of the year.
As Plumb puts it: “There is too much supply for office spaces, this is why unlike other markets, there is a shortage in office markets.”
The average sale price in the office market, however, remained stable in the second quarter, according to JLL estimates, as the “market did not witness any significant transactions and investors’ sentiments remained unchanged”. New supply, meanwhile, is expected to “push prices down in 2013”, states the report.
“Rents for the main office spaces such as DIFC and Emaar Square remained flat in the quarter, but secondary ones like the Business Bay and Jumeirah Lake Towers have decreased in price,” said Plumb.