New JLL report also says prices and rents are close to the bottom of the current cycle, likely to rise in 2017
A total of 14,600 residential units entered the Dubai real estate market in 2016, the highest level since 2012, according to a new report by JLL.
The 2016 Year in Review report said that 31,000 units are scheduled for completion in 2017, with Dubai South gaining prominence, with 550 units slated for completion this year and another 10,000 units in the pipeline.
JLL added that wwhile the Dubai market is now positioned close to the bottom of its current cycle, further declines in rents and sales prices could be experienced in Abu Dhabi during 2017.
The report said Abu Dhabi saw fewer completions than its neighbouring emirate, with 3,100 residential units completed during 2016, bringing the total stock to 248,000 units.
Looking ahead, JLL said it expects completions in 2017 along the Corniche, Al Raha Beach, Al Reem and Saadiyat Islands, adding approximately 5,000 units.
“The real estate market in the two largest emirates of Dubai and Abu Dhabi reflect their relative economic strengths,” said Craig Plumb, head of research at JLL MENA.
“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.”
The report also highlighted that Dubai is benefiting from increased spending on real estate projects in the lead up to the Expo 2020.
Data from MEED Projects suggests new construction tenders across the UAE could increase by more than 95 percent year-on-year in 2017, with the majority of this additional spending on projects in Dubai.