Study: Dubai property market can absorb 25,000 units a year

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Dubai Marina from aboveHigh growth in Dubai’s population means that the emirate can absorb 25,000 new units a year without oversupply, according to a Citibank study. The bank noted in a new report that Dubai ‘s population was growing by 7 per cent annually, reducing the risk of oversupply in its soaring property market. The drop in construction has already decreased vacancy rates significantly since their peak in 2010, the company said.

Dubai’s residential market experienced the highest level of price growth in the world in 2013, at 22 per cent. Growth has been compounded by the announcement that the emirate will host the World Expo 2020, for which new projects are already being planned and built.

Jones Lang LaSalle have said that price hikes are likely to slow down in 2014, but Citibank have warned that the reappearance of ‘flippers’ needed monitoring to avoid the surge in speculation which led to Dubai’s catastrophic crash in 2008.

Adam Price, Managing Director of Select Property Middle East, was more optimistic about the number of flippers: ”The property sector in the region is continuing to mature due to the developing infrastructure and a number of new buying regulations. This means that there has been a marked increase in the number of end-users and individual investors entering the market, rather than those simply buying for quick capital appreciation – the so-called ‘flippers’. This is strong evidence that the market is becoming much more stable and consequently we will avoid another bubble.”

He added that the Expo 2020 announcement was driving optimism: ”[It] will have a positive impact as it gives Dubai further global profile and another tangible milestone to work towards. It is predicted that is it will drive an extra 25 million visitors into the area.”

 

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Reading Time: 1 minute

High growth in Dubai’s population means that the emirate can absorb 25,000 new units a year without oversupply, according to a Citibank study. The bank noted in a new report that Dubai ‘s population was growing by 7 per cent annually, reducing the risk of oversupply in its soaring property market. The drop in construction has already decreased vacancy rates significantly since their peak in 2010, the company said.

Reading Time: 1 minute

Dubai Marina from aboveHigh growth in Dubai’s population means that the emirate can absorb 25,000 new units a year without oversupply, according to a Citibank study. The bank noted in a new report that Dubai ‘s population was growing by 7 per cent annually, reducing the risk of oversupply in its soaring property market. The drop in construction has already decreased vacancy rates significantly since their peak in 2010, the company said.

Dubai’s residential market experienced the highest level of price growth in the world in 2013, at 22 per cent. Growth has been compounded by the announcement that the emirate will host the World Expo 2020, for which new projects are already being planned and built.

Jones Lang LaSalle have said that price hikes are likely to slow down in 2014, but Citibank have warned that the reappearance of ‘flippers’ needed monitoring to avoid the surge in speculation which led to Dubai’s catastrophic crash in 2008.

Adam Price, Managing Director of Select Property Middle East, was more optimistic about the number of flippers: ”The property sector in the region is continuing to mature due to the developing infrastructure and a number of new buying regulations. This means that there has been a marked increase in the number of end-users and individual investors entering the market, rather than those simply buying for quick capital appreciation – the so-called ‘flippers’. This is strong evidence that the market is becoming much more stable and consequently we will avoid another bubble.”

He added that the Expo 2020 announcement was driving optimism: ”[It] will have a positive impact as it gives Dubai further global profile and another tangible milestone to work towards. It is predicted that is it will drive an extra 25 million visitors into the area.”

 

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