The year 2012 will see a shortage in real estate in Dubai, despite reports suggesting an 8% population decrease this year, according to a top finance officer.
Speaking to Construction Week, Landmark Properties chief financial officer Charles Neil said the real estate market can expect a rise and fall in the supply of properties in the next few years.
“At the moment there is a bit of an oversupply [of properties] because we estimate about 20,000 properties coming onto the market this year and another 20,000 next year,” he said.
“But, there will be very few units coming into the market after that because of a lot of projects have started but have been put on hold.”
Recent news reports contradict this argument and have suggested there will be a decline in population this year.
Furthermore, in April, a panel of construction experts including Emaar called for measures to halt the decline.
However, a new survey from Investment Boutique suggests that the question over population decline is unclear.
“One of the most pressing questions raised recently has been the question of whether the population of Dubai will continue to grow at break neck speed, simply slow down, or begin to decline,” the report said. “This question remains paramount because without expatriate growth, economic activity will decline causing a ripple effect that negatively impacts the property sector. “
But Neil said that this decrease is not affecting the current market. He said, due to the drop in property prices, more and more expatriates and nationals are living in Dubai now and commuting to their jobs elsewhere.
This could ultimately mean an undersupply of properties in the next few years, due to a drop in active construction, he said.
“We are [currently] finding that properties are still selling very quickly and if you want to rent a place they are not available for long. We are also seeing people from Abu Dhabi coming to live here,” he said. “But, come 2012 the market can expect to see a shortage in property supply.”
Source: Constructionweekonline
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