(MENAFNEditorial) Dubai, UAE, January 7, 2018: As we now close the books on Q4 of 2017 and reflect on the most recent quarter, it's clear that major political events to the west, and OPEC oil controls limiting production, have put pressure on and spooked the UAE market .
Why is it the market continued to weaken in 2017? The macroeconomics largely come down to world affairs and basic supply and demand.
In recent years, Dubai's new development market has gone from strength to strength, with a myriad of new projects being announced, as well as delayed projects from the last boom market resuming. Handovers for this year alone are slated to be upwards of 32,000 units, with approximately a tenth of that amount already delivered year to date.
With this in mind, there is an oversupply of off-the-plan projects, both affordable and luxury, completing in 2017 available for rent, and therefore rental yields have reduced.
As overall supply continues to increase, it is unfortunately not being met by an appropriate net increase in demand.
However, the UAE population is increasing. In 2016 the population was between 2.6 - 2.7 where as in 2011 the population was merely 2 million.
With such an increase comes a rise in job numbers and economic growth. I anticipate seeing in mid-to-late 2018 a positive phase for property, increasing by 1% (as long as there is no major impact on the area or negative political movement in other countries). This will be in response to population growth and spending from both the government and private sector, in the lead up to Expo 2020.
Residential sales in September 2016 for off-the-plan properties were sitting at around 1,500, and in September 2017 the figure was 1,752. So you can see that amid market fear, we have started to see some stability in regards to number of transactions.
The most heavily transacted areas to focus on are Dubai South (which is run by the Government, and therefore supported by a huge marketing campaign looking towards 2020), Dubai Marina, Downtown, Business, Bay, Jumeirah Village Circle, and Mohammed Bin Rashid City.
Interestingly to note, new research suggests that approximately 62.9% property industry professionals predict there will be new enquiries for real estate, therefore a hopeful number of transactions to increase
Ultimately, real estate is long term investment with a 10 year strategy, and 2018 is a moment to take advantage of prior to a rising market.
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