Dubai likely to house 90,000 new housing units in 2 years

Dubai property market will see the advent of about 90,000 new housing units over the next two years, despite the global economic turmoil.

Nearly 32,000 new housing units were completed in 2008, touching the total number of residential stock in Dubai to 253,000.

The Jones Lang LaSalle Report, however, mentions that construction delays and project cancellations will reduce the total announced residential supply by more than 50 percent. About more than half of the announced residential and commercial projects due for completion, during the two years, have been halted or cancelled, due to lack of available funding and ease of demand.

Even top developers, including Nakheel and Meraas have either rescheduled or cancelled few of their major projects. Since the last quarter of 2008, there has been a drop in prices and rentals, by up to 50 percent, depending on the area.

Prices are expected to plummet further ,for residential properties, throughout the year, hitting the bottom at 2010, said Craig Plumb. In the meanwhile, the Managing Director of Memon Investments, Ahmad Shaikhani, had mentioned that he expects UAE property sector to spring back to normalcy within next 8 to 12 months, due to the fall in construction costs.

The report agrees for the need for increased financing options, and the need for implementation of few 'radical measures' by the government, such as removing the link between residency status and employment, clarification of law regarding residency for expatriate buyers of housing units. Such measure may be required to help the market emerge stronger.

Several people are opting to rent out, rather than to buy, as the people are hesitant to buy in a declining market. "It is like catching a falling knife. Nobody knows when the market will stabilize, so it is hard to predict the bottom," Plumb concludes.