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29 March 2024

Dubai to get only 10,000 new units in 2011

Dubai is expected to see completion of close to 28,000 new units by end-2011. Picture for illustrative purpose (FILE)

Published
By Parag Deulgaonkar

The Dubai Land Department (DLD) expects about 10,000 new units to enter market this year, putting at rest speculation of the commercial and residential market is oversupplied.
 
In an e-mailed statement to Emirates 24|7, the department said: “The emirate will witness the entry of about 10,000 residential and office units during the current year.” 

No further details were given. Industry sources say almost 6,000 units have been completed or nearing completion.
 
Jones Lang LaSalle, a global real estate consultancy, said in April that Dubai is expected to see completion of close to 28,000 new units by 2011-end, bringing total residential stock to 338,000.
 
UBS, the biggest Swiss bank, said last year that it estimated housing supply by end of 2011 to be roughly 360,000 with oversupply potentially at 150,000 residential units.
 
Sheikh Maktoum bin Hasher Al Maktoum, President, Al Fajer Properties, told this website earlier: “I am expecting very limited supply to come into the market… there isn’t that much supply. We are in construction field as well and we haven’t been getting any orders for the last three to four years,”
 
Most of the project which were supposed to get completed in 2009 and 2010 are close to completion and handover this year. But in certain new districts of Dubai, handover has been delayed due to lack of infrastructure and utility connections.
 
Dubai has witnessed completion of 129 projects since 2009 with 237 out of 450 projects likely to be completed in due course, according to government’s bond prospectus posted on the London Stock Exchange. Real Estate Regulatory Agency (Rera), the regulatory arm of Dubai Land Department, said 217 property projects have been cancelled as of May 31.Currently, there were 455 registered developers and 893 registered brokers in Dubai as of May 31.
 
Currently, 114 projects have been registered with the Dubai Land Department (DLD) under the plan. For projects to be selected under Tayseer, they should be registered with the DLD; project not less than 60 per cent must be completed; have an escrow account; must be moving forward with construction plans with no issues with buyers.
 
The government prospectus further states: “Following the significant price declines since the fourth quarter of 2008 (in part reflecting the withdrawal of speculative buyers from the market), prices have since stabilised in completed developments.”
 
Last week, Nomura, a global investment bank, said prices for residential properties in Dubai and Abu Dhabi have started to stabilise and will “hold” rather than “fold” over the next six months.
 
It said that in the past two months, it has seen some positive momentum in the market – but this is prior to the traditionally slow summer season. It expects overall asset and rental values falling 10 per cent in aggregate in 2011.