Another 40,000 new homes will enter Dubai’s property market over the next two years as developers revive projects stalled after the collapse of the emirate’s real estate market, a report said on Sunday.
The new properties to be built between 2013 and 2015 will represent 11 per cent of the current stock of 357,000 units, consultants Jones Lang LaSalle said in a report on Dubai’s real estate market for the first quarter of 2013.
It said that a total of 28,000 dwellings are expected to be completed in 2013. Around 2,200 residential units, mostly apartments, have already been handed over in the first quarter of the year, which include the Spirit Tower in Dubai Sports City, Lakeside Tower in JLT, Bay Central in Dubai Marina as well as the Al Furjan Villas by developer Nakheel.
Dubai developers are reviving building plans after nearly three years of inactivity, encouraged by a gradual recovery in the emirate’s real estate after a historic collapse of homes prices by over 50 per cent from its peak in 2008.
The REIDIN general residential sale index showed the villa sale price index and the apartment sale price index increased by 17 per cent and 18 per cent year-on-year respectively, the report said.
However, concerns have been raised on whether Dubai is again attracting speculators who are aiming to make their fortunes by buying apartments and villas for cash and then selling them within weeks or days, repeating mistakes of the past.
“An initial glance might suggest that many of the conditions that led to the unsustainable growth in real estate prices in Dubai in 2006 and 2007 have returned,” Alan Robertson, the chief executive of Jones Lang LaSalle in the Middle East and North Africa said in the report.
“The excesses of the last speculative boom will hopefully be replaced by a period of slower but more sustained growth in demand and prices.” he added.
Police forces had to brought in on Saturday to control crowds after Emaar Properties, Dubai’s largest developer, offered 188 townhouses for sale in its new development called Mira.
The three-bedroom homes, part of a previously announced Reem development, were being sold at a starting cost of just 988,888 dirhams ($269,300), Emaar said, much cheaper than the market cost for such a property.
The queues of investors outside offices of major real estate developers recall Dubai’s boom days before 2008 when money poured in from around the world, creating a property bubble that eventually led to a historic crash.
An initial attempt by the United Arab Emirates central bank to curb speculative buying by introducing limits on mortgage lending for residential properties was softened in March following a plea from commercial banks.