September figures show that there are less vacant properties in Dubai following a surprise late summer rush, accordingly to the latest edition of the Gulf's only independently written investment newsletter, ArabianMoney.
Analysis of current data from the PropertyFinder.ae website shows that the residential property vacancy rate has tumbled from around 11 per cent to eight per cent over the summer, a fall of some 25 per cent in the residential vacancy rate.
"It is a big shift," commented ArabianMoney editor and publisher Peter Cooper, whose authoritative property articles are now only available in this newsletter and no longer published elsewhere. "This is a significant change in the local property market."
In June, ArabianMoney found that there were 20,130 properties listed for sale and 11,797 for rent in Dubai. That made a total of almost 32,000 or around 11 per cent of the estimated 300,000-unit housing stock.
On September 7th, the same website presented 14,984 units for sale and 9,634 for rental. The vacancy rate stood at a little over eight per cent.
"It is a supply squeeze and quite the opposite of what we expected," commented Cooper who has been writing about Dubai real estate for more than a decade.
"This could be a sign that people are actually coming back after the summer, and lower rent has brought back the commuters from Sharjah and encouraged those paying high rents in Abu Dhabi in turn to commute from Dubai," he commented.
Of the rental units in Dubai, 7,561 were apartments. Meanwhile, just 979 apartments were showing as available for rent in Abu Dhabi, where the property supply situation is very tight.
"Abu Dhabi stock has got even tighter over the recent weeks. Presently, there are 1,684 units for rent and 1,680 for sale," Cooper said.
He recalled that in June Elaine Jones, MD of Asteco, one of Dubai's two leading local estate agencies, commented that the reported 'new supply' was hard to identify; her market instinct has now shown up in the hard figures.
ArabianMoney offers several explanations for the fall in the Dubai vacancy rate: "Firstly the new supply of property is slow coming on to the market. It could also be that estimates of 30,000 new units this year are very wide of the mark, and that the more conservative estimate of 10,000 units per annum for 2010-12 is correct.
"Then again perhaps the sudden construction halt of two years ago is the explanation.
Projects that stopped may still be being counted as upcoming completions. Then again many projects seem to be working on a stop-and-go programme as money comes in and that is naturally delaying completion."
But Cooper thinks the answer is probably Dubai's reaction to the financial crisis, allowing the housing market to sort out supply, demand and price.
"Dubai has let the market system work," he said.
"The 'high' property and rental prices could not supported and were 'allowed' to fall to a level that the market can support, down by up to 50 per cent," he concluded.
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