Dubai real estate crisis: 150,000 housing units needed every year
A new survey published by the Emirate newspaper Al-Bayan revealed that Dubai real estate market needs 750,000 new housing units until 2010 to put an end to the waiting lists, which contribute significantly to the high level of renting fees.
Many real estate companies agreed that it is not sure that the introduction of 85,000 new housing units annually will be enough to reduce rental fees or to satisfy the demand in Dubai. The population of Dubai is expected to rise from 1.1 million to 2.1 million souls in 2010, while the number of tourists is expected to increase to 15 million in 2015. Many renting offices and companies agree that renting rates in the city will not decline or be corrected before 2007.
Many of the middle-income earners are leaving Dubai to a cheaper city, or sending their families back to their mother-city and staying alone in Dubai to work.
The real estate market in Dubai sees a growing demand for renting villas due to the severe shortage in housing apartments. Most of the real estate developers in the private sector tend to construct towers, aiming to gain fast and large profits.
The market is also witnessing a tendency by several development companies which prefer to purchase large land plots to construct a group of villas on them. Market analysts assess that the market needs 150,000 housing units and not 85,000 annually, but the problem is that the contracting sector can not provide this number.
Meanwhile, the number of housing units for renting in Dubai amount to approximately 300,000 apartments, but the market is in need to 150,000 new housing units to avoid the increasing rise of the renting fees, which increased by 200% during the last two years.
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