Dubai hits four-year high for new residential units

The highest number of residential units since 2012 were added in Dubai last year, according to real estate firm JLL.

In its annual report, the company said the 14,600 completions included 1,500 villas for Emirates staff in Meydan and 690 units in Wasl Oasis II in Muhaisnah.

More than 1,000 Mira townhouses in the Reem Community by Emaar and 1,200 apartment units in City Walk Phase 1 by Meraas were among the other additions.

A further 31,000 units are scheduled for completion in Dubai in 2017, according to the firm.

The new units came despite a general slowdown in the real estate market driven by the drop in economic sentiment linked to low oil prices.

Apartment rents in both Dubai and Abu Dhabi declined in Q3, according to Bayut.com.

Read: Apartment rents decline in Dubai and Abu Dhabi in Q3

“The greater diversification of the Dubai economy and the earlier downturn of real estate prices from mid-2014 means the Dubai residential market is now poised closer to its cyclical trough, while prices may fall further in Abu Dhabi,” said Craig Plumb, head of research at JLL MENA.

“As the regional economic situation improves, an increase in GCC tourism is expected to contribute to the recovery of the hospitality and retail sectors, reflecting positively on the UAE real estate market as a whole”.

JLL cited data from MEED projects as suggesting new construction tenders across the UAE could increase by more than 95 per cent year-on-year in 2017, with the majority focussed on Dubai.

“While not all of these projects are likely to materialise, spending levels are likely to increase on their 2016 levels, which were themselves higher than 2015,” it said.

In neighbouring Abu Dhabi, 3,100 residential united were completed in 2016 bringing total stock to 248,000 units. This included 700 units on Reem Island.

JLL said a further 5,000 units were expected to be added in Abu Dhabi. this year, with other scheduled projects projected to be delayed.

“Prices and rentals have been declining for longer in Dubai than in Abu Dhabi, where the market tends to lag that in Dubai by 12 – 18 months. While the Dubai market is now positioned close to the bottom of its current cycle, further declines in performance could be experienced in Abu Dhabi during 2017,” JLL said.