Dubai’s residential market is poised to rebound in 2017 from its cyclical downturn since mid-2014, as oil prices stabilize and real estate projects gain steam in the lead up to the Expo 2020, according to a new report.
There are 31,000 residential units slated for completion in Dubai this year, according to the United Arab Emirates real estate market report released Monday by JLL, a Chicago-based global real estate consultancy.
Dubai South, an area around the new Al Maktoum International Airport, looks to attract the most activity, with 550 units scheduled for completion in this year and another 10,000 units announced and in the pipeline, according to JLL.
The optimism is coming from a couple of factors.
Dubai’s real estate market is expected to benefit from the city’s hosting of the Expo 2020, a world fair with varied themes to showcase achievements of nations. Leading up to the exposition, the United Arab Emirates is expected to invest US$100 million in new constructions across the nation in 2017. That’ll be a 95% increase from last year, noted JLL, citing figures from Middle Eastern business information firm MEED. The majority of the spending, about US$66 million, is concentrated on Dubai projects.
Mansion Global is now on LinkedIn. Join the discussion.
Additionally, both housing supply and demand are signaling a healthier real estate market. A total of 14,600 units entered the market in Dubai during 2016, the highest level since 2012, according to JLL. Home sale prices also saw signs of stabilizing during the last quarter of 2016. Apartment prices declined 1% year-over-year while single-family homes recorded a 2% increase.
Meanwhile, crude oil, the main economic driver for Dubai and the whole UAE, traded higher toward the end of 2016. Oil prices reached US$45 per barrel in December, a sharp rise from the US$30 per barrel oil was selling for in January 2016. Recovering oil prices will improve economic growth and employment, which will in turn boost the real estate sector, JLL said.
In comparison, Abu Dhabi, the UAE’s capital city, could see further declines in sales prices during 2017, JLL predicted, citing its less diversified economy and fewer planned projects compared with Dubai. Abu Dhabi added 3,100 completed residential units in 2016, with approximately 5,000 units in the pipeline for 2017.
Write to Fang Block at firstname.lastname@example.org
click to read More about Dubai real estate from Mansion Global:
Follow Mansion Global:Facebook | Twitter | Instagram | LinkedIn | Messenger
Write to us: email@example.com