Creation of more jobs in the UAE will aid in recovery of the real estate market, believes a property expert.
“Creating more jobs is the key to the recovery of the real estate markets in both Abu Dhabi and Dubai,” Craig Plumb, Head of Research Mena, Jones Lang LaSalle (JLL) told Emirates 24|7.
He believes property prices have already stabilised in preferred locations in Dubai, for example the Palm Jumeirah, Arabian Ranches and the Lakes while price decline in Abu Dhabi properties will be more pronounced than Dubai this year as more supply comes on line.
“Residential sector is close to bottom of cycle with some locations already seeing prices/rents increase while others are seeing continued falls. During 2012, more sectors will move into the recovery stage, but this will not be universal, with prices/rents continuing to decline in some locations.”
According to JLL’s 2011 third quarter report, Dubai will get 25,000 new units this year, while 20,000 new units will be released in Abu Dhabi. The numbers are likely to drop due to delays.
Although office market is currently still in downturn phase of cycle, Plumb says rents/prices have stabilised in best quality buildings.
“While rents and prices are stable for the best buildings, tenants have an increased choice of projects and this will mean that prices and rents are likely to decline in all but the best buildings in 2012.”
JLL’s third quarter 2011 report estimated around 1,000,000 square metres of new supply in Dubai, while Abu Dhabi would get close to 500,000 square metres of office space.
“In reality, not all of this space will be delivered as projects continue to face major delays due to construction, contractual and permit issues,” he added.