The property market in Dubai is stabilising and set for a rebound in 2011, according to the latest research but there is still a concern in the industry about over supply.
A new report from international property consultants Jones Lang LaSalle shows that the volume of transactions has remained consistent in the first half of 2009 and the narrowing gap between asking and achieved prices is a further indication that the market is improving.
'The stabilisation of transactional volumes is an important indicator which reflects improved confidence among investors and the market is beginning to stabilise albeit at significantly lower levels of pricing than those seen earlier in the year,' explained Craig Plumb, head of research at Jones Lang LaSalle Mena division.
But the report also reveals that fewer than half of the property units expected to come on stream in Dubai by the middle of the year have been delivered. It had expected 22,400 units to be delivered in the first half of 2009 but less than half have done so.
'It is quite difficult to ascertain the actual number, but according to our survey less than half of the units have been delivered by midyear,' Plumb said.
In February the Real Estate Regulatory Authority in Dubai said that 31,003 and 43,880 units were set to enter the market in 2009 and 2010 respectively. However, its studies and research section had said that 20% of residential units will not enter the market on time in 2009, while 40% of residential units may be delayed in 2010.
The amount of units that complete is crucial to the emirates real estate recovery, according to Plumb. It will be the future supply of properties and employment opportunities generated in Dubai that would determine the revival time for the market.
'There are a lot of factors that affect the real estate market, but the prime ones are future supply of units and population growth and shrinkage,' he added.
He reiterated that Dubai's property market was expected to see a rebound in 2011 after stabilising in 2010.
