Total residential supply for 2018 amounted to 21,014 units
Research by Property Finder has found that 21,014 residential units, comprising apartments, villas and townhouses, were completed by the third quarter of 2018.
This has been more than the number of units handed over in the past few years, and the inventory will help tenants to negotiate for more competitive rents. However, the year-on-year drop in prices coupled with additional supply and subdued demand means we can expect more price declines in 2019. This bodes well for long-term renters who can now consider home ownership.
- At the end of 2018, 33,982 residential units were under construction in Dubai with a completion status of at least 65%
- Southeast and southwest parts of Dubai are seeing the most activity
Until October 2018, there were an additional 14,707 residential units with a 95 to 99% completion status. However, only 1,187 of those units were completed by the end of the year. The “Property Finder Trends” report estimates the remaining 13,520 units to be completed in the first half of 2019.
“With the considerable amount of supply already released into the market, and the upcoming supply through 2022, the prices we are experiencing today are the new normal”
There is more residential supply to add to this spillover stock. At the end of 2018, Property Finder research found 33,982 residential units under construction in Dubai with a completion status of at least 65% and completion scheduled for 2019.
Adding the 13,520 units that were to finish in 2018 to the figure slated for 2019, 47,502 units are likely to be handed over by the end of 2019. Although so many homes are unlikely to be completed, the rate of handovers has increased over the past year and it will continue in 2019 as developers rush to complete projects ahead of Expo 2020.
“While many believe we are in a slump and property prices will go back to pre-2016 levels, the reality is that with the considerable amount of supply already released into the market, and the upcoming supply through 2022, the prices we are experiencing today are the new normal. We can expect prices to decline further in 2019 as the market absorbs the immense amount of supply that came in 2018, and what will complete in 2019,” says Lynnette Abad, Director of Research and Data, Property Finder.
Overall, the southeast and southwest parts of Dubai are seeing the most activity with ongoing developments such as Reem’s Mira Oasis, which will have 1,393 units in three phases once it is complete, the “Property Finder Trends” report adds.