Estimates of between 90,000 and 140,000 homes coming into the Dubai market over the next few years could be exaggerated, according to a new report from
HC Brokerage
.
The brokerage concludes the number is closer to 60,000 units, citing an analysis of the balance sheets of the five largest developers in Dubai. What's more, they say that this number will be roughly equivalent to the demand for units between Dubai and Abu Dhabi.
Excerpt:
Dubai's services based economy is the most correlated to the global economy and as such was hardest hit by the crisis. The fallout of which was mass layoffs as companies looked to reduce their overheads and consolidate their activities, leading to an expatriate exodus. This, along with stock additions, the legacy of an overbuild period driven by speculative demand and hot money, has resulted in a rapid drop-off in occupancy levels, and hence rental yields.
On the other hand, however, the pace of construction has also slowed as developers continue to put on hold or delay projects. Also, weakening demand in Dubai has been helped by a significant spill-over from Abu Dhabi, and even Sharjah and Ajman, driven by relatively attractive rentals. Also it is important to mention that several Dubai residents who lost their jobs were able to find opportunities in Abu Dhabi, thus maintaining their residence.
On the other hand, however, the pace of construction has also slowed as developers continue to put on hold or delay projects. Also, weakening demand in Dubai has been helped by a significant spill-over from Abu Dhabi, and even Sharjah and Ajman, driven by relatively attractive rentals. Also it is important to mention that several Dubai residents who lost their jobs were able to find opportunities in Abu Dhabi, thus maintaining their residence.
