Saturday, June 21, 2008

UAE realty market likely to stabilize by 2010

The UAE property market will attain a demand-supply balance during 2010-2011, as vast supplies of properties are expected during the coming years, reveal recent reports.

The UAE realty market has seen major growth over the past couple of years, due to several factors at the micro and macro economic levels. However, the prices of real estate products is likely to increase during the coming years, with the high demand from expatriates, and due to increase in cost of labour and construction materials, says Bilal A Kanbar, Business Line Manager, Impaqta.

According to a property report released by a Saudi-based management advisory services company and Great Properties, a real estate sales and marketing agency, based in Dubai, the real estate boom in UAE is likely to face a major hindrance which will seriously affect completion of projects across the emirates.

As per the report, one major problem is the ready-mix concrete suppliers, struggling with huge backlog due to massive shortage in cement supplies. To add to this, the prices of cement and steel have surged by 50 and 70 percent respectively last year. Increasing labour costs, which has gone up by three times over last year, is another factor.

The report states that delay in delivery of new properties has resulted in rent and price increases, by 40 to 50 percent over the past couple of years in Dubai.

According to Kanbir, most projects are still under construction, and the next series of supply will hit the market by 2010, and this will is expected to bring in stabilization in property prices.

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