It’s a start of a brand new year, and a brand new decade for that matter. It’s that time for business analyses and market indexes to release forecasts and predictions across various industries.
For the past several years, the UAE Property Market has endured a continuous decline following a drop in oil prices in 2014 and an oversupply in properties. Last year alone, more than 47,000 units were surveyed to be handed over, according to the new statistics from UAE-based portal Property Finder. And according to a recent report by consultancy firm JLL, Dubai sales prices for apartments were 7 percent lower and 9 percent lower for villas hitting a nearly seven-year low.
Price decline to slow down in 2020
But Dubai is optimistic as this slide in property prices is expected to slow down in 2020.
Figures show that transactions have already picked up in sales in the last quarter of 2019, according to data provided by Property Finder. There were 4,774 property sales registered at the Dubai Land Department in October 2019, the highest record for the past ten years.
This year, we are expecting 50,000 projects to hit the market with apartments taking a huge chunk of the pie. This is good news for tenants as rents will decline further into 2021. Dubai is reaching a peak in project delivery for both residential and commercial markets with developers aiming to handover projects before Expo 2020.
ROI for investors
As the Dubai property market is maturing, Developers are more rational now in terms of launching new projects to create a healthy balance between supply and demand. Latest data also shows that Return on Investments for properties will come to a more practical and realistic level as market starts to stabilize this year.
According to Haider Tuaima, head of real estate research at ValuStrat, property investors should target low- to mid-income households to get the highest yield in returns. Tuaima believes that investors should look at studio to one-bedroom apartment units located in Discovery Gardens, International City, Production City, Dubai Silicon Oasis, Jumeirah Village and the like with the release of more apartment units.
What Expo 2020 means
Everyone is looking forward to how things will change in the Dubai Property Market. And the Emirate’s 50-year plan and Dubai Expo 2020 will be the key indicators to lead the headwinds of the property market.
As optimistic as the property market looks and slowly picks up, Economic leaders are expecting the Expo to bring in millions of visitors this year and waiting if these short-term visits can be translated into long-term residencies or investments.