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The market research, economic forecast and the study of the recent trends in population dynamics of the UAE by organisations such as Deutsche Bank, Shuaa Capital, Colliers International and EFG-Hermes reach to conclusion that the UAE's real estate sector is headed for an amendment. However, most of the analysts believe that the realty market will not crash or undergo a severe correction rather it would be slow fall.
Shuaa Capital report says, “We expect a minimum of 125,000 units to hit the Dubai market alone between 2007 and 2009, of which the majority is due in 2007 and 2008. By 2009, we estimate there will be a total of 77,000 units targeting high-income occupants, while the projected total demand for these units is just 36,100 for the same year. On that basis, we expect the occupancy level in the high-end apartment segment to fall below 50% and thus make investor objectives increasingly difficult to achieve, as they typically require average annual occupancy levels in excess of 75%.”
The UAE real estate market has witnessed unusual growth in investments and consequently in property supply over the past five years. The supply of properties in all the segments, the residential, commercial, hospitality or retail segments of Dubai and Abu Dhabi , has not yet been able to fulfil the growing demand.
(Khaleej Times)
