Dubai Realty Lagging Behind Global Boom
A supply glut that’s held down Dubai’s property prices for over half a decade will likely keep it on the sidelines of a global upswing in values of prime residential real estate citing Knight Frank research.
Fast emerging from the pandemic slump, the construction industry will deliver an estimated 62,000 homes in the emirate this year and nearly 63,500 in 2022, which would be the most since 2009, according to consultancy firm Knight Frank.
The burst of supply will probably leave Dubai, alongside Buenos Aires, as the only two cities in Knight Frank’s selection of 25 prime locations to witness a decline in values for their top-end residential properties. “The supply-demand imbalance has been a defining feature of Dubai’s residential market ever since the Great Recession of 2008-2009,” said Faisal Durrani, head of Middle East Research at Knight Frank. “Looking at the next few years, this looks set to persist.”
The pandemic compounded the pressures from job losses and departures of foreign workers, chipping away at demand for rentals. Still, Knight Frank forecasts prices will decline at a slower pace thanks to easing travel restrictions and plans to stage the postponed Expo 2020 later this year. With “an improved economic outlook, business confidence is rising and that is filtering through to the property market in the form of heightened interest and rising deal volumes,” Durrani said.