Dubai: Developers dismiss oversupply concerns as demand stays strong

Prices in the emirate have reached all-time highs, especially in areas like Palm Jebel Ali, Business Bay, Downtown and Dubai Marina among others

Waheed Abbas

Published: Sun 10 Nov 2024, 9:45 PM

There is no oversupply in Dubai property market as demand for new properties stays persistently strong, said real estate developers.

Dismissing any concerns around excess, developers and real estate industry executives say that consistent rise in residential property prices is a testament that there is no oversupply in the market.

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“Property prices are rising in Dubai and it looks like the boom will continue despite some tailwinds. Dubai has become a globally relevant city. When we compare Dubai to other major metropolitan cities around the world like Hong Kong, London, New York and Singapore, real estate is still cheaper here. There is no oversupply. If there was an oversupply, why would prices be rising in Dubai,” said Issa Abdul Rahman, CEO of Kasco Developments.

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“In a market where supply is at an all-time high alongside record transaction volumes, we are witnessing a clear trend of sustainable demand,” said Firas Al Msaddi, CEO of fäm Properties.

Prices in Dubai have reached all-time highs in many areas especially in Palm Jebel Ali, Business Bay, Downtown and Dubai Marina among others.

Villas and townhouses have seen a 75 per cent surge in average property price with apartments following closely behind at 55 per cent year-on-year, according to the Allsopp & Allsopp Market Snapshot for October 2024.

Dubai’s property market continued to exceed expectations, with the Dubai Land Department reporting sales transactions surpassing 20,460 units in October for the first time in history. This is a record-breaking 82 per cent increase year-on-year.

“While this surge may seem unsustainable, it presents a huge opportunity in Dubai'd property market. Essentially, it's about time in the market, not timing the market. The longer you own a property, the more likely you are to benefit from capital appreciation. You're reducing debt, increasing equity, and likely to see continued price increases,” said Lewis Allsopp, chairman of Allsopp & Allsopp.

Watch out for Al Jadaf and Dubai Island

Abdul Rahman added that property prices this year increased by close to 20 per cent in Business Bay. “Al Jadaf area has really taken off this year. Price rises in Al Jadaf have been even more dramatic, rising by 40 per cent. A lot of projects are being launched at Dubai Islands also,” he said, adding that Kasco Development is also exploring Palm Jebel Ali.

“Our intention is (to have a presence) for a long time and you will see us all over the place over the next 10 years. In the UAE, we have completed five projects and three under development. We are offering quite an attractive payment plan which is 40 per cent during construction and 60 per cent on handover.”

The developer is investing Dh1.2 billion in three projects – one in Business Bay and two in Al Jadaf.

“We acquired the plot in Business Bay just under a year ago and since then prices have definitely increase. We are seeing buyers increasing from European countries recently, which has more to do with the uncertainty in Europe as investors look to move their funds abroad and see Dubai as their natural destination because of the safety, stability and legal frameworks in this city. Investors are mainly coming from France and the UK,” said Abdul Rahman.

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