Emirate's property sector proves resilience during coronavirus period, completing 30% of 45,720 units in H1
Dubai's real estate is expected to gain momentum in coming months, with economic activities having resumed and developers racing against time to complete their announced projects ahead of Expo 2020, experts said.
Analysts and industry executives said the emirate's property sector has proved its resilience during the coronavirus outbreak by completing around 30 per cent of an announced 45,720 residential units during the first half of 2020.
In its latest first-half report, real estate consultancy ValuStrat said approximately 14,000 residential units were completed during the January-June period this year. It is estimated that 34,917 apartments and 10,803 villas are under construction and will come online this year as developers are keen to complete their projects before the Expo, which was rescheduled to October 2021.
"Per an estimate 45,720 residential units to be completed in Dubai during 2020, but judging from the past few years, some delays are to be expected," Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times on Sunday.
"As far as announced project completion schedules are concerned, about 80,008 residential units to be completed in Dubai during 2021. However, we expect 30 per cent to 40 per cent of that number will be completed on schedule."
The real estate sector plays a big role in the UAE's economy, primarily in Dubai. In addition, the other member emirates, notably the capital Abu Dhabi, have shown great strides in developing their local property market in the past few years.
As per latest data, the property sector's contribution stood at 5.4 per cent or Dh80.2 billion of GDP at constant prices for the UAE. The sector contributed 7.4 per cent or Dh15.5 billion and 3.6 per cent or Dh28.7 billion, of GDP for Dubai and Abu Dhabi, respectively.
Imran Farooq, CEO of Samana Developers, said the postponement of the Expo for a year due to the pandemic has given a full year's opportune time to Dubai's real estate in particular, and 192 countries in general to build the iconic pavilions.
"We will be delivering 115 units of Samana Greens in Q4 2020. In September 2021, 205 units of Samana Hills will be delivered which is ahead of schedule. As we see today 50 per cent structural completion of a Dh100 million Samana Hills has been completed, which will enable its early delivery and will perfectly match with the start of the Expo, on October 1, 2021. We are advancing it to get the maximum benefit of the mega event," he said.
He said Samana Developers' projects remain unaffected by the current pandemic and restrictions. "We managed and ensured to continue construction works at two of our residential projects, Samana Hills and Samana Greens. Rather, we managed to prepone the Samana Hills project," he said.
Samana Greens has achieved a 93 per cent construction milestone. And Samana Hills has reached 50 per cent structural work.
"All this happened during the pandemic period. To continue the workflow, we first followed stricter safety measures and then started two shifts of workers," he said.
"The UAE government did not stop construction activities during the lockdown period, which helped us to manage the construction of works. There was minor delay in construction work between March-June, but managed it with the double shift," he added.
Supply-demand imbalance
Tuaima said there were significant demand-supply imbalances during the 2012-14 period, where Dubai had an average of 90,000 additional residential units.
"During 2018-21 we expect to have less than 70,000 additional residential units. And if we analyse demand-supply affordability, then we can safely say that capital values have already touched 2010 levels, which potentially makes Dubai homes as affordable as a decade ago," Tuaima said.
Farooq said echoed the similar view and said the Expo will be a game-changer for the real sector and shrink the gap between demand and supply of residential units in Dubai by next year.
"Yes, there is an imbalance of demand and supply for residential units in Dubai. But I am pretty sure the Expo will correct it. My rationale behind it is that the huge influx of visitors, where 192 countries will participate and during the Expo's six months duration, which is plenty of time for a market to correct and recover in the Expo situation," he said.
"I believe the six-month period will be a game-changer for Dubai's real estate, tourism, travel, hospitality and related businesses."
Popular areas
Tuaima said Dubailand will get the prime share of new developments in Dubai as more than 50 per cent of announced 80,008 residential units will be completed in this area.
"More than 50 per cent of residential units are to be completed in Dubailand area - Akoya Oxygen, Town Square, Arjan, Mudon and Liwan, among others - Jumeirah Village Circle and Mohammed bin Rashid City," he said.
"Dubai South's new supply represents 7.8 per cent, or 3,500 units, [though] it's not significant in the great scheme of things. Not much new supply is expected on the Metro extension route either," he added.
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