Residential Real Estate News
Dubai Property Market Re-Emerging from Pandemic Outbreak
According to GlobalData, Dubai's construction sector is showing early signs of a long-awaited recovery in 2021. Government-controlled real estate developers are planning new projects in response to rising property prices buoyed by the emirate's recovery from the economic impact of the COVID-19 pandemic.
Colin Foreman, Deputy Editor at GlobalData's MEED says, "Companies such as Nakheel, Emaar and Meydan are in the early stages of planning new projects. These schemes include villa communities and waterfront apartments, two property classes that continue to perform well with strong demand. Villas are performing well, in particular."
The clearest sign yet of the resurgent market came on 20 May when Nakheel announced its first new project launch for years. It plans to build a community of 418 villas known as Murooj al-Furjan next to the existing Al-Furjan community in the Jebel Ali area. On 23 May, the developer reported sales of AED800m ($218m) and sold out the 217 villas of the first phase in four hours.
Foreman continues, "While opportunistic or tactical projects in established locations with proven demand will be the first to be launched, plans are also being considered for strategic projects in newer areas of the emirate: areas such as the Dubai Waterfront and Palm Jebel Ali area on the coast close to the Abu Dhabi border. Although work has begun in these areas before, few established communities exist. As Dubai's centre of gravity continues to move south - as a result of Al-Maktoum airport, the Expo 2020 site and the Dubai South development - the area could now be ready for development work again."
With the property market showing signs of recovery, there is an expectation that major infrastructure schemes requiring the involvement of international contractors may also move forward.
Foreman added, "Before the pandemic disrupted Dubai's economy last year, MEED reported in February 2020 that Dubai Municipality was preparing to issue tender documents for construction work for the planned deep tunnel sewer network serving the old areas of Deira and Bur Dubai. It is expected to be tendered as a public-private partnership (PPP) scheme using a similar business model to the Thames Tideway scheme in the UK.
"Another major infrastructure scheme that has been considered as a PPP before includes the Green Line extension for Dubai Metro. While Dubai's track record for delivering infrastructure projects as PPPs has yet to be fully established, its ability to sell and deliver ambitious real estate schemes has been tried and tested over the past two decades.
"With government budgets still under pressure from the COVID-19 pandemic, it will be crucial for Dubai to develop alternative ways of delivering infrastructure if any recovery for the construction sector is to move beyond a boom in villa building."
