Creation of more jobs will help in recovery of property market in the UAE, said a real estate expert.
According to Head of Research – MENA at Jones Lang LaSalle (JLL), Craig Plumb, creation of more jobs holds the key to recovery of real estate markets of Dubai and Abu Dhabi.
Craig points out that real estate prices have already stabilized in preferred locations in Dubai, such as Arabian Ranches, Palm Jumeirah, and the Lakes, while the decline in prices in Abu Dhabi, will be more than in Dubai, with more supplies entering the market.
The residential sector in Dubai is close to bottoming out, while few locations are already seeing increase in prices and rents. This year, more sectors are likely to see recovery, although this may not be a universal phenomenon.
According to the third quarter report of 2011 by JLL, Dubai will get an additional 25,000 new units this year, while in Abu Dhabi there will be 20,000 new units. There may be a drop in these numbers due to delays.
The office market, however, is still in a downturn phase. Rents and prices have stabilized only in best quality buildings. The tenants have more choice of projects, and this implies that rents and prices are likely to decline in all, but, only the best buildings in 2012.
The third quarter report of 2011 by JLL estimates that nearly 1,000,000 square meters of fresh supply will enter the Dubai and Abu Dhabi markets. Abu Dhabi will get nearly 500,000 square meters of office space. However, not all these spaces will be delivered, as projects continue to meet delays, owing to issues such as construction, contractual and permit issues.