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Dubai property market will be more affordable in 2021

JBRDubai
An oversupply of residential and commercial units will create bargains for the industry

With an excess in supply, the Dubai property market is set to become more affordable this year.

This news comes on the back of a property slowdown for the UAE, which has been attributed to both the challenging oil markets and the slowdown due to the coronavirus pandemic.

According to reports, property prices were 8 percent lower in Dubai in the fourth quarter of last year, and 4 percent lower in Abu Dhabi.

OVERSUPPLY WILL CONTINUE TO AFFECT THE PROPERTY MARKET WELL INTO 2021

Unfortunately, it will take some time before the property market bottoms out. That’s down to the fact that an increasing number of commercial and residential units continue to go online, and the UAE’s oversupply continues to build.

According to numbers released by the research division of JLL, more than 53,000 homes will be handed over in 2021, which will lead to a 9 percent increase on the total 595,000 residential units already on the market in Dubai at the end of last year.

Both the oversupply and number of units expected to be delivered in Abu Dhabi is lower, at 265,000 and 15,000 respectively.

LIGHT AT THE END OF THE TUNNEL

Fortunately, the UAE government has several events and initiatives in place that aim to turn this trend around.

Dubai Expo is expected to stimulate demand, which is scheduled to start in October of this year. The event is expected to boost corporate travel and commercial tourism, both of which would certainly benefit the market.

Late last year, the UAE also amended its commercial companies’ law that required onshore companies to have a majority Emirati shareholder. The move opened up the country to increase future foreign investment, and will arguably drive both residential and commercial property demand in the country.

Other initiatives, such as relaxation for visas for expatriate retirees will only further stimulate interest in the property market.

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