(MENAFN– Khaleej Times) Dubai’s residential property market supply has been lagging behind population growth with the affordable segment also witnessing shortage after luxury in certain areas of the emirate.
Industry executives say that supply will not be able to keep pace with the demand even in 2024 due to the high influx of foreigners and residents increasingly turning buyers amidst rising rentals.
Around 50,000 new residential units were handed over in Dubai in 2023, which is nearly half of the population increase.
According to Dubai Statistics Center data, the emirate’s population grew by over 100,000 in 2023 to more than 3.65 million by mid-December, resulting in very high demand for residential properties.
The increase in population is attributed to the high inflow of foreign workers, professionals and investors who flocked to the emirate this year, attracted by the higher returns on investments and the introduction of a variety of residency permits.
This was reflected in the Dubai Land Department’s 9-month data which showed the number of transactions jumped by 33.8 per cent to 116,116 worth Dh429 billion.
There are areas of under-supply which have contributed to price growth in recent years, e.g. the villa market, waterfront locations, and mature, established communities which are now ‘built out’ with little or no land left for further development. In these segments, demand often exceeds supply and drives price growth.
“Strong economic fundamentals, positive sentiment and inbound population growth drive demand. Tenants have increasingly moved into home ownership instead of paying rising rents,” said ValuStrat analysts.
In the first half of the year, real estate consultancy ValuStrat said there was a high demand and a supply shortage for larger homes in prime locations. However, more recently, the demand trend has shifted towards more affordable areas as buyers seek lower prices and opportunities for