Huge residential real estate supply should be available in Dubai by the year 2020 as per reports on account of several off-plan projects being launched over the last two years. However, experts feel that housing demand will hit the roof in demand and may even cross supply levels of real estate. The skyrocketing demand augurs well for Dubai real estate markets and developers now have to come up with strategies in order to meet burgeoning demand levels. More than 21, 000 units were handed over last year in Dubai and more than 10, 400 units have already been handed over in 2018 as per reports. 40, 000 units are expected to be ready by the end of this year according to reports with 15-20% being the average rate of materialization.
More than 70, 000 units will be completed next year with 35, 000 units expected to be completed in the year 2020 as per reports. Most of the upcoming real estate supply will be in the Business Bay, Dubailand, Downtown Dubai and Jumeirah Village Circle zones. 1, 66, 483 units are expected to enter the Dubai realty market by end 2019 and 76% of this tally will comprise of apartments while 18% and 6% will be townhouses/villas and commercial properties respectively. Dubai has already been witnessing a growth in overall population levels by 5% on an average annually and this will account for the higher demand.
As per other reports, close to 200, 000 people annually come to Dubai and at least half of this number need apartments. Around 25, 000 new apartments are annually required in Dubai if one assumes an average of four people living in an apartment. Over the last few years, deliveries have been between 15-17, 000 units annually. Added supply will help in keeping prices at lower levels for both rentals and sales and this will heighten disposable income for buyers. There will be more expats investing in Dubai real estate after new regulations unveiled by the Government and after the 2020 Expo, there will be a tremendous impact on the hospitality, economic and retail sectors and this will positively rub off on the real estate sector as well.
The population of Dubai witnessed a growth of 278, 000 people in the last year, spurred by more business opportunities and growth in employment prospects. A high chunk of housing demand generated out of the 2020 Expo will be garnered from professional staff and blue-collar employees who earn lower than Dh5, 000 each month. Other accommodation will be needed for project managers, engineers, technical personnel, financial, marketing, IT, HR and other divisions needed for building new projects and working in the same subsequently post the event. Around 20 million estimated visitors for the 2020 Dubai Expo, a large chunk may consider staying in the city for employment or business purposes. The Dubai Smart City initiative may also spur growth along with the 10-year visa rule, new rules for foreign-owned organizations and a conducive environment for start-ups and new entrepreneurs among other factors.
