Nowadays, old residential projects can no longer compete with new, higher-quality, and attractive ones in the Dubai market.
Some real estate experts expect that outdated villas for sale in Dubai will compete unequally with newer housing stock. This is especially true for apartments in the Dubai housing market, “as new apartments with more spacious layouts, favorable payment plans, and amenities in the communities will be more attractive for both tenants and investors.”
The Dubai residential market has increased to 618,000 housing units through the replenishment of the housing stock by 10,000 units over the last quarter. Another 36,000 units of new real estate will be built in Dubai by the end of 2021.
As for price indicators, the total sales and rental rates in Dubai continued to decline by 2% and 8%, respectively, over the year.
At the beginning of the year, there is an increase in demand for high-quality villas in the residential market, which will increase real estate prices in Dubai by 10% compared to the same period last year.
Forecast for office market
As for offices, both the pandemic and the lockdown have slowed down the development of this real estate sector. In the second quarter of 2021, there were no new office premises in the Dubai market. It is expected that an additional 70,000 sq. m. of office spaces will be commissioned in Dubai in the second half of the year.
Tenants still prefer equipped Class A office space, rather than empty offices without repairs and furniture. Nevertheless, landlords offer potential tenants benefits such as long-term free rent and maintenance fees.
As a result of this situation in this sector, office rental rates have recently decreased by 1% over the year and reached $460 per square meter. The number of unoccupied office space in Dubai has increased to 20% compared to the same period last year.
Hybrid work models
However, not everything is so bad for the Dubai office sector. As vaccination goes on in the UAE, more and more employees return to their jobs, but corporations today are forced to use hybrid work models for employees. More and more companies are converting workplaces or looking for converted offices for rent. Due to the easing of restrictions in Dubai, many international companies are requesting office rentals and are interested in local offices.
In the second half of the year, it is expected that the office market will be also weak and inefficient. In addition, the Arab office market is still focused on tenants. And they will be able to take advantage of current market conditions and modernize offices with limited capital costs.
Ax Capital is your help in purchasing a villa in Dubai
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