Report says 21,700 residential units were delivered in Dubai in 2018, the highest number of completions for seven years
A total of 21,700 residential units were delivered in Dubai in 2018, the highest number of completions since 2011, according to a new report.
Research by Dubai-based real estate agency CORE said approximately 83 percent of 2018 deliveries were apartments while 17 percent were villas.
With over 25 percent of the total stock, Dubailand continued to see the highest number of deliveries, followed by Jumeirah Village Circle and Triangle (13 percent).
CORE said off-plan transaction volumes in Dubai dropped by nearly 30 percent from 2017 to 2018, while secondary market sales saw a 9 percent spike, reflecting an end-user market.
It added that both rent and sales prices continued to see drops across districts of the city.
CORE said it conservatively estimates over 28,500 units to be handed over by the end of 2019, with the majority forecast in the affordable to mid-market segment.
"We expect rents to remain under pressure in 2019 and the rental market to continue being tenant friendly. We expect secondary transaction volumes to remain resilient, while sales prices are forecast to drop further due to rising levels of existing inventories and upcoming supply," the agency said.
According to CORE’S report, 2018 was a year of "landmark reforms", with the UAE government announcing a number of resident and investor friendly initiatives.
Edward Macura, partner at CORE, said: “2019 and 2020 are critical years in Dubai's growth trajectory. Although the pace of price softening has relatively slowed, we expect a lag in sales and rental price recovery as existing vacant stock and future supply over the next couple of years is expected to outpace steady demand.
“That said, the market is highly occupier friendly due to the wide variety of options now available at very competitive prices with higher levels of flexibility offered by both developers in new launches and landlords in the rental market,” added Macura.
"We expect rental prices to remain under pressure in 2019 and the rental market to continue being tenant friendly, with landlords reducing rents during renewals to retain tenants and maintain occupancies, with many also open to multiple check payments.
In the sales market, we expect transaction volumes to remain resilient, particularly in the secondary market as demand drivers such as steady oil prices, continued government spending and investor/occupier friendly regulations help absorption. That said, sales prices are forecast to remain under pressure in the foreseeable future as the market gradually adjusts to supply and demand dynamics."