Dubai's real estate sector will not see a recovery until 2011 at the earliest due to an oversupply of properties, Jones Lang Lasalle has predicted.
In its latest report on the emirate's homes market, which has seen price falls of more than 50 percent in some areas from peaks on summer 2008, the firm said a total of 22,000 units were expected to be completed this year.
Its study of Q1 prices also saw a further 25,000 units coming online in 2011, 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.
Jones Lang Lasalle said apartment rents in Dubai continued to decline in the first quarter of 2010 by an average of four percent. Rents were down by about 21 percent year-on-year.
However, the report indicated that villa rents in the emirate had stabilised in Q1, with marginal declines of one percent. Year-on-year, villa rents were down by 32 percent, it added.
"Despite the recent stabilisation 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 said.
It said that lending would be a key factor in the market recovery, adding that "improved lending" had been witnessed throughout 2009.
"This trend is likely to continue into 2010," Jones Lang Lasalle said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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