Dubai to face new housing shortage by 2020

Dubai to face new housing shortage by 2020

Following a period of stabilisation, the Dubai housing market could experience a supply shortfall in 2020.

Summary:

  • Dubai may need more low-end and ultra-luxury properties to cope with housing demand in 2020
  • The year will see the start of the six-month long World Expo event
  • Dubai’s property market is more equipped for long-term stable growth than it has been in the past

The Dubai property market could experience a new period of undersupply as World Expo 2020 approaches.

This is the view of Jesse Downs, Managing Director of Phidar Advisory, who was speaking at the Destination Dubai 2020 conference, who outlined. There could be property investment opportunities at the lower end and the very pinnacle of the market.

She said: “There is a shortfall and it is considerable. We see an additional undersupply by 2020. There are opportunities, but where are the opportunities? I think we are overbuilding for the mid- and high-income sector.

“We need more mid-low and low income, and genuine luxury, as well.”

According to global real estate consultancy Jones Lang Lasalle, 25,000 housing units will be added to the Dubai market this year and this may sate demand for a short period.

However, the emirate will need a significant number of new developments as it expects to receive 25 million tourists during 2020, while the economic activity associated with the expo may well generate around 270,000 new jobs.

Also speaking at the conference was Franck Delage, EMEA Real Estate Analyst at S&P. He explained the emirate’s real estate market is much better prepared for long-term stability than it has been in the past, with more regulations in place to help reduce the risks.

Mr Delage said the ratings agency has given all of Dubai’s real estate corporates a stable outlook and he doesn’t expect this rating to change over the next 12 months.

The expo will run for a period of six months, commencing October 20th and will extend into April 2021.

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