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Residential sales prices and rents were still on the rise, but the rate of growth slowed dramatically for both sales prices and lease rates, according to a Phidar Advisory report.
This has led to yield compression, but the report also states that as many as 30,000 additional units are needed through 2018 to maintain rent stability. This figure is based on Phidar's internal monitoring of announced, launched. stalled and ongoing projects.
Based on transaction data from the first six weeks of the third quarter, the report also states that nominal prices for single family homes declined 4 per cent and 0.6 per cent for apartments. Phidar's House Price Index reflects real prices adjusted in representative projects across Dubai that have been completed since 2009.
Residential development opportunities are still ample in Dubai, but the market would benefit exponentially from developer specialisation, particularly in the most under-supplied assets. In this case middle-income housing could be a tangible and powerful catalyst, the report states.
Phidar indicates that over this period another 15,000 units could be reactivated from stalled projects, thereby creating a viable supply gap of as many as 20,000 units.
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Source: Property Weekly