Last year witnessed a rush of developers launching new projects. This year off-plan launches have slowed down significantly. There have been 7,800 units launched so far this year, significantly less compared with around 18,000 last year and the lowest for the past three years, says Faraz Ahmed, research manager at JLL Mena.
Launches from private developers have been particularly reduced in areas such as Jumeirah Village Circle, Marjan, Arjan, Dubai Hills and Dubailand. “In 2018, there was a minimum of two launches per week,” says Kunal Puri, founder and CEO of La Capitale Real Estate. “In the current market, one would find only three to four launches per month. At Dubai Creek Harbour, there were over 18 to 20 launches in 2018. In the last six months, there have hardly been six. At the Rivera or Victoria master development projects in Meydan by Azizi, there used to be a launch every three days. This year hardly five launches.”
The major launches this year have been by Emaar, Meraas, Dubai Properties and Damac. “Emaar and Meraas have focused on beachfront areas like Emaar beachfront and Meraas’ Bulgari Island, Madinat Jumeirah and La Mer,” says Puri. “Dubai Properties has focused on Villa Nova and Mudon in Dubailand. Damac’s focus has been on Damac Hills in Dubailand.”
Along with the slowdown in new launches, developers have also increased the pace of new deliveries. “This has given buyers options to consider between waiting for a new unit for the next two to three years or buy something ready with finance,” says Ankush Midha, manager of Unique Zone Real Estate.
According to Ahmed, the change in strategy helps developers sell more of their existing stock with minimal impact on the market conditions. “In the mid-term it will help stabilise the supply-demand dynamics,” he says.
With Expo 2020 standing on the doorsteps of Dubai and the emirate expecting to record 25 million visits, most developers have utilised 2019 as a “year of delivery”, says Puri. He sees this trend continuing throughout next year.
“Real estate markets go through a cycle of seven years, where prices drop and then stabilise,” says Puri. “This cycle sometime goes to nine years. We are currently in the segment of decline and then again the market will go upwards, which is expected post 2020.”
Developers understand these factors and adjust their product launches accordingly. “The limited number of launches has always helped the real estate industry towards a more matured and stable market,” says Puri. “The visible evidence is in the increase in the number of transactions in 2019 over 2018, as recorded by the Dubai Land Department. With the focus on delivery to fulfil the Expo 2020’s unprecedented demand, most developers will focus on project completion and deliveries.”
With the international environment and a global recession looming, chances of a sudden increase in launches would be highly unlikely and unhealthy, says Midha. Moreover, the present market offers buyers best bargains from resale and ready units through developers.