End of ’09 might bring 30,600 vacant homes to Dubai

A news report prepared by JP Morgan has concluded that by the end of 2009, Dubai will have 30,600 empty homes, because the population is decreasing and more buildings are completed. The report also expressed concerns about a recovery in the emirate's troubled property sector.

A well known newspaper, keeping the report under consideration, said that Abu Dhabi faces a shortage of 28,000 residential units.

The report specified that the forecast of 3.5 percent population growth for Dubai is unlikely to absorb the upcoming supply of residential units beyond 2009.

It should be noted that vast wealth is being used by the oil-rich Abu Dhabi to press ahead with infrastructure projects, although at a slower pace; while the economic downturn has hit Dubai adversely.

The investment bank specified, "In the short term, we expect the non-residential sector in the UAE to remain under pressure given the global financial crisis. However, the historical shortage of both retail and commercial space in Abu Dhabi has kept falls in leasing rates well below Dubai."

A significant fall has been noticed in rents in Dubai by more than half in some areas since their 2008 peaks. However, a rise in occupancy has been noticed in areas closer to the Abu Dhabi border, as renters from the UAE capital move there to take advantage of lower rents.