Dubai realty market likely to stabilize by 2010

With vast supply of properties expected to hit UAE property market during the coming years, the realty sector in UAE will witness a demand-supply balance during 2010-2011, reveal recent reports.

According to Estatesdubai.com, the currently the UAE real estate market is enjoying a boom, and has been rated as the most active among all property markets in the GCC region.

The UAE property sector has grown considerably over the past five years, due to several factors at the micro and macro economic levels, like the population growth, for instance, which has touched 7 percent per annum.

From today till 2010, UAE do not expect any slowdown in property prices due to the gap maintained between demand and supply. 2010 and 2012, are the opening date of many projects, and hence there are no possibilities of price reduction. It is believed that prices of real estate products will continue to increase during the coming years, due to higher demand from expatriates and due to increased cost of labor and construction materials.

As per the property report released by Great Properties, a Dubai-based real estate sales and marketing agency, the UAE realty boom is likely to face a major roadblock, which may seriously hinder the completion of projects across the emirates. The report states that the real estate market is more of investors' market rather than buyers' market, due to which the realty prices have surged tremendously. The developers are facing high construction costs and delayed completion of projects.

The report reveals that the main reason behind such a scenario is the ready-mix concrete suppliers, struggling with a huge backlog of orders due to immense shortage in cement supplies. Even the prices of cement and steel have gone up by 50 and 70 percent respectively last year.

This being an international trend will have its impact on real estate prices, along with inflation, and high demand. Another major concern for the contractors is the labour, as rents of camps have increased during the past two years, with the resulting costs too, rising up to thrice the value of last year.

Further, the report states that delay in delivery of new properties have led to further rent appreciation with the prices increasing by 40 to 50 percent during the past few years.. Most projects are still under construction, and the next wave of supply will hit the market towards the year 2010, and this will bring about equilibrium in property prices.

The Report was undertaken by ImpaQta Management Advisory Services, a key knowledge resource in the Middle East region, together with Great Properties, an expert marketing, sales and post-sales services agency, for offering interested parties with decision-making tools, future forecasts, and analysis of UAE realty market, and guiding them with property investment opportunities, indicating the factors that boost the sector.

Great Properties is currently working on several projects across the UAE. This report is their latest offering, which aims to create a brief understanding of the UAE realty market so as to enable investors, brokers and developers to remain better informed about market trends and current product prices.