2019 will also continue to be a pro-buyer property market in Dubai. Due to ample existing and recently delivered supply, sales prices are likely to remain under pressure in 2019.
According to ValuStrat, prime residential areas, which saw relative resilience in 2018, may continue to see some improvement. Capital values for some high-yielding mid-affordable areas may experience downward pressures as a result of burgeoning supply.
"There are over 125,000 units anticipated over the next two years [2019 and 2020]. However, due to historically lower realisation rates, our conservative estimate for actual delivery is at around 48,500 units as developers are increasingly becoming aware of the market conditions and trying to either hold back stock or phase deliveries to align with demand. We expect buyers to prefer ready units or units nearing completion," said Robert Thomas, associate director, residential at Cushman & Wakefield Core.
In the rental market, the older centrally built stock will be unable to retain its novelty, with the occupier preference partially shifting to outer areas where newer and competitively priced options increasingly become available.
"Citywide rents are anticipated to see further softening, particularly in areas with handovers of long overdue projects, mostly located within the E311 corridor and including projects such as Living Legends in Dubailand, The Villages in Dubai South, Damac Hills in Dubailand, Hayat Townhouses in Town Square and Mudon Villas in Dubailand," the ValuStrat report said.
"2019 will see the real estate market stabilise with a stimulus towards the end of the year to cause an upward turn. The secondary market will continue to stay consistent in 2019 as the market matures," reckoned Lewis Allsopp, CEO of Allsopp & Allsopp.
Damac Properties is bullish about its prospects in 2019. "We expect business to continue as usual. The cooling market will continue, but as the UAE market matures and competition continues to rise, developers will become more attuned to market demands and deliver on it," said Niall McLoughlin, SVP at Damac Properties.
Meanwhile, Atif Rahman, director and partner, Danube Properties, said: "The impact of Expo 2020, an improved regulatory system, continued spending on infrastructure, increasing oil prices and additions to tourist attractions shall all boost the real estate industry. While I am bullish about the real estate sector starting from 2019 all the way until the Expo, I am also confident of the positive after-effects of Expo 2020 on trade and the economy of Dubai. The biggest gainer will be the real estate industry as it remains one of the key contributors to the GDP."
P.N.C. Menon, founder and chairman of Sobha Realty, sounded upbeat in his outlook for 2019. "With more people choosing Dubai as their home this year, this will lead to higher residential demand. When customers have many options, we see a trend of them moving towards qualitative developers who deliver projects above the market standards in terms of product quality, amenities and timely deliveries. Dubai real estate investments are tax-free and they have a good capital appreciation along with good rental yields. Residential demand will steer more towards end-users," he continued.
