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Housing shortage driving up prices
Property prices in Dubai have risen as much as 10 percent more than expected this year due to the continued lack of housing supply in the market, EFG-Hermes said on Sunday.
The Egyptian investment bank said in a report residential property prices have jumped 14.4 percent so far in 2008, compared to an expected rise of 5-10 percent for the entire year, according to newswire Bloomberg.
The bank said delays in building homes were supporting high prices, the result of a shortage of contractors and construction materials, as well as rising costs.
The supply of new property "came short of our expectations for a fourth year", Sana Kapadia, an EFG-Hermes, said in the report.
"The supply of new units remains a key determinant of the timing of a potential correction."
EFG-Hermes had previously forecast around 64,000 housing units would be delivered this year, but said in the report this is unlikely to be met.
It said supply is expected to peak in the first half of 2009, with 70,000 units scheduled to come online.
On the severity of a future correction in the property market, EFG-Hermes said the diversion of money to Abu Dhabi, the global economic slowdown and soaring house prices are all factors that could lead to a steeper correction.
The results of a survey published on Sunday by UAE daily The National found house prices have risen every month for the past year, with villa prices up 76 percent in the 12 months ending August, office prices rocketing 74 percent, and apartment prices 63 percent.
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Comments 1-8 of 8
Posted by JOHN on 27 September 2008 at 17:11 UAE time
TAKE MY ADVICE: PACK AND GO. ITS GONNA BE EVEN WORSE. WHY? BECAUSE NOBODY WANTS TO LISTEN TO YOU. YOU DON'T LIKE IT YOU CAN GO. ITS NOT ONLY THE HOUSING, ITS SALIK, RTA, MUNICIPALITY, ETISALAT, DU, DEWA, WEAK $ V/s €, HIKE IN PRICE OF OIL, VISA FEES, EDUCATION, CLOTHING, FOOD, MEDICATION, ETC.... YOU DON'T LIKE IT??? NOBODY CARES.
Posted by nom on 22 September 2008 at 11:57 UAE time
is arabian business blind! unbelievable! your surveys are way off the chart! what a away to ruin the day.
Posted by fed up on 22 September 2008 at 10:23 UAE time
The increase in rents and my landlords wish to evict me so his son can live in my present villa (even though there is an empty one in the same small compound) yes he needs my specific villa to move his son into... has come as a blessing in disguise, rents have gone up around an extra 100k in this area, so now I am priced out of the market I will finally leave the country and break the tie after 11 years here, the difficult desicion has been made for me... I now look forward to looking for pastures new and an exciting new challenge, I suggest more people look at this and consider a new strategy and let Dubai take its well earned fall from grace and market correction, the one thing I will be happy about is I moved on before the inevitable bursting bubble..
Posted by SR, Dubai on 22 September 2008 at 09:49 UAE time
Yes, there is a shortage of AFFORDABLE housing.
Posted by Juleka Majeeth, Dubai, UAE on 22 September 2008 at 08:15 UAE time
Shortage of houses??!!! Seem to be like a joke. Just drive around the border between Dubai and Sharjah. Several high storey apratments are empty, waiting for someone to occupy. You would seee long banners hanging as TOLET. They keep on rising the rent and also buying cost due to greed. They don't care to keep it empty..un-occupied.
Posted by Ron, Dubai, UAE on 22 September 2008 at 07:10 UAE time
what shortage?
i dont see people living under any bridge? or carton mansions? so umm what shortage?
I'm sure the Government can put a stop to this any second.... So why have they not bothered to step in yet...? :/ is it maybe a lot of the real estate developers are state owned? :O
Posted by Apartment seeker, Dubai, United Arab Emirates on 21 September 2008 at 23:20 UAE time
I think it is insane that aritcles such as this one are still being published. There is plenty of apartments and villas available in Dubai. Just open Gulf News and you will be welcomed by two to three "catalogs" full of buy/rent ads. What Dubai IS missing is AFFORDABLE living space. The prices are astronomical because a select few want to get rich quickly at the expense of those who desperately seek afordable living, but are unable to find any. Does "10 people caught living in a 1-bedroom apartment" ring any bells? Therefore, if any newspaper, and specially a highly respectable one such as Arabian Business plans to publish articles about shortage of housing, please do some homework prior to posting/printing.
Posted by Paul, Dubai on 21 September 2008 at 15:57 UAE time
All those embezzling execs skimming off the top of real estate sales probably aren't helping either. Embezzling = higher sales price = higher mortgages = higher rents.