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With each passing quarter, the number of homes that is to be delivered in Dubai this year is getting whittled down further. In its latest estimates — at the end of the second quarter — the consultancy ValuStrat reckons only 16,326 units are to be delivered during the year.
This is “half of the estimate” quoted the quarter before, a clear sign that Dubai’s developers will need to see a lot more happening on the ground — in terms of sales transactions — to get going on project deliveries. So much so, nearly 8 per cent of existing projects in Dubai will take a further two to three years to get past the completion, ValuStrat states.
And another “17 per cent have been delayed 18 months to 2 years,” it adds. If these delays do prove to be the case, it will mean two things — one, no one need worry of a glut heading in the run up to the Expo 2020 event and, two, the pressure in the residential rental space is not going to ease up in the way it did in the sales market.
According to ValuStrat’s projections, there are already some indications of a slight firming up in home rents. Median asking rents were 1.3 per cent higher than in Q4-15 and 2.8 per cent over Q1-16. Clearly, some of Dubai’s landlords are confident enough to demand more. Whether they are getting it remains to be seen. (The ValuStrat data is based on a selection of freehold clusters alone.) But on a year-on-year basis, apartment asking rents are down 5 per cent, while those for villas are lower by 6 per cent. Come September, a more precise status should be available for the villa space, where job losses in senior executive ranks across key sectors have led to villa leases not being renewed. Plus, these vacated villas are remaining on the market for longer.
Source: Staff Report, gulfnews.com