According to a wide-ranging consensus based on a lot of well respected data, the Dubai property market bottom sometime around the middle of 2011 and has, on the whole, been enjoying a steady recovery since then (obviously with gaping differences from sector to sector and location to location).
Before the recovery began, one of the biggest questions asked of Dubai was whether or not it would ever be able to absorb its oversupply built-up during the boom. But as the recovery picked up pace such questions were drowned out by the positive reports.
According to a new report from Asteco thousands of apartments are due to come online in the second half of 2012. Dubai currently has 402,800 apartments, 58,300 villas and 9.1 million square meters of office space. The report from Asteco says:
"Assuming construction schedules are adhered to as at the time of inspection, we believe the second half of 2012 will see 11,600 apartments, 6,100 villas and 770,000 square metres of office space delivered to the market.”
The general sentiment of the Asteco report is that the supply will not have a detrimental effect on the recovery, even though it is bigger than expected due to slow construction progress delaying some developments.
According to the report quality developments in popular areas will continue to stand out from the crowd and will continue to attract rising rents and prices, while developments in less popular areas will remain stable. However, Asteco does foresee that rising rents will lead to more and more potential tenants being forced out of their first choices into looking at the less popular areas, which could have a positive knock on effect.
- Friday 20 July 2012