Chances of Dubai’s home prices starting to record sharp gains are marginal. On the contrary, both sales and rentals could remain under considerable pressure.
In an ideal world, Dubai would see another 140,000-plus home being completed over the next 24 to 36 months. But given how developers have fared in keeping their promises, that tally seems remote. As per available indications, developers could have handed over about 15,000 units in 2017, far removed from the 25,000-30,000 predicted at the start of last year.
And even “if the project realization rate by the developer’s increases [50 percent in three years] that may prevent prices to move upwards and also pressure rentals,” said Ozan Demir, Director of Operations and Research at the consultancy Reidin.
Last year was one of the most active for off-plan releases in the last five years.
As for potential buyers, they should keep a few pointers in mind. “Check the developer’s reputation and take location and completion dates into consideration while negotiating price,” said Alexander von Sayn-Wittgenstein, Luxury Sales Director at Luxhabitat, the estate agent. “As for sellers, the prices are expected to flatten further so don’t be in a hurry to sell your property just yet. Renting it would be a good option instead.”
There are market sources who worry that cutting down the size may put off end-users from buying. A typical four-member family might find it extremely difficult to squeeze into a sub-800-square-feet home. They may be willing to do so if it is rented, but putting up money of their own to buy would give them pause.
Clearly, Dubai’s developers will have some chopping and add up to do in 2018 and beyond.
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