Recovery for Dubai real estate is lagging behind the rest of the Gulf region, as the market is plagued with excess inventory, despite a rash of postponed and canceled developments. But major projects are underway and slated to open soon across the Arab Emirates, with many units pre-sold as developers respond to the appeal of efficient building in a changing market. See the following article from Property Wire for more on this.
Although a recovery in the real estate market in the gulf region is widely believed to be some way off there are signs of confidence and normality returning to some parts of the sector.
Developers in the United Arab Emirates have pledged to pay closer attention to consumer demand as new supply comes onto the market. They are also being urged to build more efficiently as this will make service charges lower and units more attractive to buyers.
‘You have to provide a service and a product that people want. It’s no longer a build and they will take it market,’ said Ian Albert, regional director of Colliers International.
Ousama Ghannoum, marketing director at developers Aldar said they were listening to the new market dynamic. ‘Things are changing. People don’t just want three or four bedroom properties, they want one or two bedrooms maybe. We are definitely listening to demand,’ he said.
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Despite headlines about project failures and cancellations a number of key developments in the region are progressing. The first residents on Abu Dhabi’s Reem Island megaproject, which will eventually be home to 200,000 people, will be able to move in August, according to a senior official at master developer Tamouh.
‘Delivery of the Marina Square project to institutional investors will start in May, and we are expecting units to be ready for residents after a four month period,’ said Samia Bouazza, director of sales and marketing.
‘In addition, the Mina Zayed mixed used project, which consists of four buildings, is more than 50% complete,’ he added. But, while all the Marina Square units have been sold off to investors, Tamouh is still unsure as to the demand from end-users.
Aldar’s Ghannoum confirmed that just weeks before the first precinct in its flagship project in Al Raha is handed over, more than three quarters of the units have been sold. ‘There are a little over 500 residential units in Al Bandar coming online in June and over 75% of them are already sold,’ he said.
The second precinct, Al Muneera, will be handed over in two phases next year, the island in April or May and the mainland in July or August.
But in neighboring Dubai the real estate sector will not see a recovery until 2011 at the earliest due to an oversupply of properties, according to a new report from Jones Lang LaSalle.
In its latest report on the emirate’s homes market, the property research firm said a total of 22,000 units were expected to be completed this year, bringing the total residential stock to about 320,000 by the end of 2011. However it added that continuing project delays and cancellations were likely to reduce future supply estimates.
Apartment rents in Dubai continued to decline in the first quarter of 2010 by an average of 4% and rents were down by about 21% year-on-year. But villa rents have stabilized with marginal declines of 1% in the quarter although they are down 32% year on year.
‘Despite the recent stabilization in pricing levels, Dubai’s residential market will experience a situation of oversupply and prices are not expected to recover before 2011 at the earliest,’ the report says.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.