Dubai only has 18,210 freehold properties
Posted on 05 February 2009 with no comments from readersOrder my book online from this link
The statistics published in Emirates Business 24/7 from the Dubai Land Department today revealed that there are only 18,210 completed freehold properties in Dubai, 13,774 apartments and 4,436 villas.
This must make Dubai one of the world’s smallest property markets and ought to put some of the gloom and doom predictions about real estate in the emirate into perspective.
Upcoming supply
Of course, there are reckoned to be around 60,000 units under construction and due for completion over the next two years. But that number is falling daily with project cancellations.
Morgan Stanley says $263 billion worth of real estate projects have been delayed or cancelled because the UAE’s property sector has been dealt a ‘worse than expected’ blow by the global financial crisis. Only yesterday major developer Deyaar announced 50 per cent of its portfolio was either cancelled or under review.
The supply and demand dynamics of Dubai are hugely debated in local business circles. But eventually the two will reach an equilibrium and then prices will start to rise again.
It is just a question of when, not if, and measures to improve the availability and affordability of mortgages would go a long way to speeding things up.
Small market
The good news for the UAE policy makers is that reviving a local property market as small as the one revealed in Dubai is nothing like as difficult or expensive as the problems facing the US or UK, and is perfectly possible.
It might even be argued that it is for the long term health of the property sector to have a purge, eliminating the weakest and least financially secure developers and stopping an over-supply of property from developing.
That said the announcements from some smaller developers that they are signing contracts with builders and going ahead might suggest that this purge has some way to go yet.
no Comments posted by readers:
Peter, don’t you think that there are more than 18,210 ready properties in Dubai. I know this number is coming from RERA, but it I just feel that this number is too low. If you take into account all the completed properties in Marina, JBR, Greens, tecom, Emirates Living, JLT. I remember Dubai properties when they were handing over JBR announced that the project comprises 20,000 units!
Also what is your take on the news about Amalak and Tamweel merger. It was published in Gulf News today that the government is rethinking the merger and there might let them go under
JBR has 6,500 units not 20,000 – it is big, but not that big. There must be some properties not yet registered but not that many – I am sure this is a good guide to the actual number of completed properties – those still to be delivered are another matter.
See the other post on this blog on Amlak-Tamweel. I should not think bankruptcy is an option for then the existing mortgage holders would be free of their debt!
accurate data (or at least ball park) is absolutely crucial to project demand and supply equilibrium. emirates hills alone has 8000 villas, there is also arabian ranches with at least 5000. those 2 alone are 3 X the figures in the report.
Peter, these stats need to be looked at more closely: the number of villas is certainly wrong. According to Emaar there are over 4,000 villas in Arabian Ranches alone. I think the problem may be that the RERA number perhaps only reflects registered properties. (We moved into AR in 2007, and our villa remains unregistered to date.)
Yes I think this data is inaccurate – and probably there are twice as many freehold units – but that is still not much for a city the size of Dubai, and perhaps it tends to suggest that the worst doom and gloom fears will not being realized. I don’t know what to say to people who do not live in Dubai and yet reply to this blog with lots of reasons why the market will crash very badly. They must be hoping it does do!
One could ascertain that UAE’s property market including freehold and non freehold sectors is turning out to be the largest & the most known of the middle east as only a few other countries permit freehold properties to be sold in the Gulf.
I also believe that Dubai has the largest freehold property sector in the entire region. After that Bahrain has the 2nd largest freehold real estate sector in the Gulf.
In fact, many people might not know this, Bahrain was the first country in the gulf to introduce legalized freehold Properties in the year 2001; whereby issuing a decree to this accord. Also developers in Bahrain take the cake for planning the first artificially reclaimed island (Amwaj Islands) in the ‘ME’ as early as 2000. Later on it seems it was also the first reclaimed island in the region to be occupied for the first time; and many of its projects having been handed over 1 year to 6 months before Palm Jumeirah started getting occupents.
It seems I’m not the only one who felt that this number is unrealistic. I don’t agree with the statement “not much for a city the size of Dubai”. Even though the standard of living in Dubai is relatively high – at least used to be! The number of wealthy individuals (employed or self employed) is not that huge to occupy this number of freehold properties. A recent study indicated that the number of medium net worth individuals is roughly around 120k and high net worth (earning 50k+) is around 95K. This is across UAE and including UAE nationals, so the number will surely be much less in Dubai. Keep in mind that most of the wealth is concentrated in Abu Dhabi – executive salaries for locals or expats are much higher as well.
Also the vast majority of UAE nationals (who control all the wealth) have no interest in freehold properties, other than flipping. Hence, I think this number of freehold units will be too much for a city of the size of Dubai.
Dubai was built on the premise of “build it and they will come”, but unfortunately it seems no one is coming anytime soon.
There is one solution to Dubai’s realty problem, but it’s a really crazy solution. Dubai government should push back the handover of all properties scheduled for 09 and 2010. I’m fully aware that everything is sold, but maybe they can arrange some sort of compensation. I know this is hardly feasible, but I think we are looking at a disaster with the massive number of units due for handover over the next couple of years.
These stats are only for freehold properties and not for common hold or usufruct. I am sure common hold figures must be a lot because Dubai’s commercial property is very expensive and people tend to share the cost rather than buying the whole property alone.
If you say so but i don’t find Real Estate market in Dubai stabilizing in 1-2 years. Prices are left 40-50% of actual cost i dont see it coming back soon.