Only 40 percent of projected supply had reached the Dubai market over the past five years, resulting in a possible undersupply
Dubai may be suffering from an undersupply of property despite concerns to the contrary, according to UAE-based real estate portal Property Finder.
Based on figures from from independent Property Finder research, at least 16,000 properties have been added in Dubai in the first nine months of 2018.
It said total residential stock stands at 503,000 units, 413,000 of which are apartments and 89,833 of which are villas and townhouses.
But despite supply overtaking 2017 figures, it said that only 40 percent of projected supply had reached the Dubai market over the past five years, resulting in a possible undersupply.
Lynnette Abad, director, Research & Data at Property Finder, said: "We often hear concerns about potential oversupply in the market, which would theoretically drive down value unless demand increases. However, many consultancies and advisories such as JLL-Mena estimate that in the last five years, only 40 percent of projected supply has actually entered the market.
"With a similar materialisation rate, and continued net immigration rates, the market may actually be undersupplied."
According to Property Finder, the top five areas where the majority of new supply was handed over were Al Khail Heights in Al Quoz, Jumeirah Village Circle, Downtown Dubai, Dubai Marina and Arabian Ranches 2.
“Based on these new statistics and adding on for what we expect for the remainder of this year, the total supply of 2018 has already exceeded the amount of new supply in the market compared to 2017 where we saw 14,700 units total handed over,” said Abad.
With respect to the remainder of 2018, figures show that another 25,000 units are scheduled to be delivered but the materialisation rate will be much less.
Property Finder also said developers have been slower to pick up on the trend of supplying the Dubai property market with more affordable properties that will garner investment from residents in Dubai who are looking for cheaper options.