Due to adding a record number of new residences on Dubai’s property market, the GCC emirate’s long-running real estate decline is expected to hit bottom in at least two years.
Dubai’s property market will see the addition of around 31,500 homes this year, more than twice the emirate’s average annual demand over the previous five years, Bloomberg News reported on Tuesday, citing Craig Plumb, head of Middle East research at broker Jones Lang Lasalle.
About 22,000 homes were finished in Dubai last year.
Plumb said that he doesn’t expect the market to hit bottom until 2021 on the back of a lift delivered by the World Expo 2020.
The six-month Expo 2020 Dubai will be held on 20 October 2020 to 10 April 2021 and is expected to welcome more than 25 million visitors.
The UAE’s officials may take steps to stabilise the market by slashing construction, Plumb added.
Since its peak in October 2014, the Dubai real estate market’s long drop has beaten all recovery forecasts over the last several years.
Though the slippage of global oil prices, Saudi Arabia’s fiscal austerity and a strong dollar have kept potential buyers away, the projects’ construction, much of it by state-owned developers, hasn’t slowed to meet the tepid demand, the new York-based news agency said.
Jones Lang LaSalle Inc, a leading worldwide real estate firm, projects Dubai’s residential values to fall by 5% to 10% this year. Values have slid around 25% from the 2014 peak, including a 10% drop in 2018.
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