Friday, July 02, 2010

33,000 new homes to enter Dubai residential sector by 2011

The total number of residential units in Dubai is likely to touch 320,000 in number by end of 2011, an increase by 33,000 from the current level. However, prices may not recover completely by that time, said Jones Lang LaSalle in its latest report on the real estate market.

A total of 26,000 units are likely to be ready this year, followed by another 25,000 in 2011, making the total residential stock touch 320,000 by end of 2011, said the leading market research company.

With about 54 percent of the units are likely to be ready in 2010, and about 14,000 units are due for completion by end of second quarter, with the current residential stock in Dubai touching 287,000.

The second quarter of this year, showed an increase in residential property transactions in Dubai by 50 percent, indicating great improvement in market conditions, the report pointed out.

Although the number of residential transactions also grew by 49 percent, there is still a 35percent slump, compared to the previous year, the report said.

But, despite the recent stabilization in pricing levels, the residential market in Dubai will experience a situation of over-supply, with prices unlikely to recover prior to 2011, the report noted.

However, the mortgage sector showed signs of recovery, with more banks injecting liquidity, and the residential sector thereby showing signs of improved lending this year, the report said.

Most residential projects seem back on track, with no major additional delays seen during the second quarter of 2010. The report said that no major delays are foreseen in the residential sector for the rest of the year.

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