A record number of residential units expected to come online in the second half of the year will push Dubai property prices lower, according to a report by the portal Property Finder on Tuesday.
A total of 20,978 residential units were completed in the first half of 2019 comprising 14,999 apartments, 1,084 serviced apartments and 4,895 villas and town houses, according to Property Finder estimates. An additional 38,426 residential units within 152 projects that have at least an 85 per cent completion status as of July, are scheduled to be delivered by the end of the year.
“With a record number of units expected for the second half of the year, we can expect prices to decline further as the market continues to absorb these units,” said Lynnette Abad, director of data and research at Property Finder.
“Increased residential supply bodes well for residents as they will continue to have more leeway to negotiate prices in the rental market. For the sales market, an influx of new supply, without being outstripped by demand, will continue to make the city more affordable both for residents as well as investors,” she said.
Notable handovers this year so far, include the DT1 tower in Downtown Dubai with 130 apartments, Al Sarfa compound by Meraas in Al Sufouh with 44 villas, Sidra Community (512 villas) and the Maple I and Maple II sub-communities of Dubai Hills Estate (1,312 villas).
Villas were also added in Sobha Hartland Estate in Mohammed Bin Rashid City (48) and in Emaar's Vida Hills (426 apartments).
Within the master-planned community of Town Square by Nshama, six additional projects were expected by the end of 2018. So far this year, 579 units in Safi Apartments and 680 additional units in Zahra Breeze were completed, and others can be expected to follow by the end of the year, according to the report.
New projects slated for the remainder of the year include the first phase of Arabella villas, Seventh Heaven in Al Barari, Acacia apartments in Park Heights within Dubai Hills Estate, 458 town houses in Serena and Jenna apartments in Town Square.
Phase 1 and 2 of Azizi Victoria with 2,550 apartments in total, Wind Tower 1 and 2 in Jumeirah Lakes Towers with 620 apartments and three towers yielding 1,427 apartments in Al Habtoor City are also scheduled for completion this year.
“Overall residential stock is expected to reach 637,000 units by the end of 2020, correlating to more than a 10 per cent increase in recent years. While there are concerns of supply increasing ahead of demand, a more affordable market overall would be a welcome trend for residents and investors,” Property Finder said.
The latest survey comes as rents and sale prices continue to decline in Dubai. Average apartment prices in the emirate declined 15.1 per cent in the second quarter of the year, compared with the second quarter of 2018 with villa and town house prices dropping 14.7 per cent during the same period, a report by property consultancy Cavendish Maxwell recently said.