Just 40% of the projected supply of the property market is achieved in the past 5 years. This has led to a potential undersupply which suggests the Dubai property market is experiencing problems. According to UAE-based real estate portal Property Finder, the city could be suffering from an undersupply of property despite concerns to the contrary.
These findings are based on figures from the survey by the independent house finder. Property Finder targeted at least 16,000 properties that have been added in Dubai within the first nine months of 2018. The total number of residential stock is at 503,000 units, 413,000 of which are apartments and 89,833 are villas and townhouses.
This number surpasses the 2017 figure but fails to reach the projected supply of the past five years. Only 40% of the supply was achieved for the 5-year period. This is per the estimates of many consultancies and advisories, such as JLL-Mena and the like. The director of Research and Data at property Finder Lynnette Abad talks about the reports they often hear about the potential oversupply in the Dubai property market. Lynnette feels this would theoretically drive down the value of properties unless the demand increases.
Adding on the matter, Abad said that the new statistics together with their expectations of 2018, the entire property supply in the city had already surpassed the supply experienced last year which had a total of 14,700 handed over. Five top locations where the majority of the new supply was assigned according to Property Finder include:
– Al Khail Heights
– Dubai Marina
– Downtown Dubai
– Arabian Ranches 2
– Jumeirah Village Circle
While considering the remaining part of 2018, there will still be an undersupply since the materialisation rate will be much less even if 25,000 units are planned to be delivered by the end of the year. Developers, the house finder also said, have been slower in the picking up of the trend of adding the supply of Dubai property market with more affordable properties. These purchasable properties could garner investment from those who reside in the city, especially those who are looking for cheaper options.
Now the question most of the property investors in the city are asking themselves is could the property market of Dubai be suffering undersupply problems? This could also be an issue for any new house finder in Dubai. Considering that there is an inadequate supply of properties, people will experience challenges in finding homes.
With just 40% of the planned 5-year project achieved, one may wonder if the problem of lack of homes will end. Obviously, there are people who in the city will have real problems finding a home. The undersupply will also make the available property very expensive and unaffordable for most people. There is a probability the residents will suffer as the market suffers.