The number of new homes in Dubai is expected to grow by 34,300 in the next two years, as a prolonged economic slowdown hits demand. Dubai will have more than 340,000 residential units by the end of this year and is already oversupplied by 25 per cent, according to Colliers International, the property consultant. "We see no reason to believe this will improve; it should actually worsen," said JP Grobbelaar, the director of research and advisory at Colliers.
"Unless there's a significant increase in population over the next two years, we expect these vacancy levels to increase." Mr Grobbelaar added that property prices in the emirate, which had fallen by 48 per cent in the past year, would only start to level out once demand started to exceed supply. The broker believes the office sector will be worst hit, with the oversupply expected to double in the next two years.
"It's going to be a long and slow recovery," he said. "Levels of economic activity are greatly reduced - we don't see any economic drivers that will lead to an increase in demand and absorb the additional supply coming on to the market." @Email:email@example.com