Aaround 28,500 units (against an announced number of 56,000 units) will be handed over this year, according to research by real estate consultancy Core.
Of this around 81 per cent are expected to be apartments, while 19 per cent are villas. Majority of the deliveries are forecast in the affordable to mid-market segment in the outer areas, with Dubailand and Jumeirah Village Circle and Triangle accounting for one-third of all handovers.
The real estate industry’s performance in the next two years will be critical in Dubai’s growth trajectory, according to Edward Macura, partner at Core.
This is especially after around 21,700 units were delivered last year, the highest number of deliveries since 2011.
21,700Number of units delivered in 2018
“Although the pace of price softening has relatively slowed, we expect a lag in sales and rental price recovery as existing vacant stock and future supply over the next couple of years is expected to outpace steady demand,” he says.
Prominent handovers in 2018 include multiple project deliveries in Damac Hills Master Development, Hayat Townhouses, Bluewaters Residences and Oia Residences in Motor City, says Macura.
In its findings, CBRE also observed a spike in scheduled residential supply ahead of Expo 2020, benefitting from the enhanced infrastructure.
Saleem Rafiq Karsaz, CEO of Aeon & Trisl Real Estate, said that despite softening market conditions, return on investments have been a steady 7-8 per cent.
“Dubai offers a great entry point for everyone at all points in time. For example, in 2014 if you were buying a property worth Dh4 million, your rentals would be Dh300,000. In 2019 a property worth Dh3 million will have a rental value of Dh200,000. So even if rentals have come down, so has the property prices and that matches the ROI.”