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According to senior representatives of the Dubai real estate industry, the demand for real estate in the emirate remains quite high, despite the oversupply, and the supply demand balance can probably be reached by 2022.
Despite the fact that the oversupply is still a concern for most experts, they exclude a drop in demand, since it is estimated that in Dubai in 2019. Experts believe that the excessive supply will keep after 2020, so the restriction in the new housing completions over the next 12-18 months, and not after that, will help achieve a balance in the future.
After EXPO-2020 there will be no significant growth, they say, therefore the Dubai real estate sector is likely to maintain its current state over the next few years, given that new projects will be massively handed over after 2020, at least in 2021 and 2022 .
Only when the gap between supply and demand is narrowed enough can , experts claim Until then, prices will remain under pressure, most likely until 2022.
Hussain Sajwani, the head of Dubai's leading developer Damac Properties too does not see a decline in demand, but still, he is also concerned about oversupply.
“I do not think that demand will decline, at least now, when a total of 25,000 to 30,000 sales are expected by the end of the year. There is the demand, and it will stay. But the main task that we must cope with is an excessive supply. If we control this area, prices will come back very quickly. We need to limit new handovers only for a period of 12-18 months — not more. The supply isn’t so great to really worry about, but in the era of information efficiency, the price rises or falls very quickly,” Sajwani shared his opinion.
Since mid-2014, property prices in Dubai have decreased by about 25 per cent, the result of the much needed correction down to the real level after the 2009’s bubble. According to a Reuters survey, main Dubai’s real estate market players and buyers expect the average real estate price in the emirate to go down by 10 per cent in 2019 and by 5 per cent in 2020.
And the JLL company estimated that the average level of completion in Dubai over the last three years was about 20,000 units per year, while up to 60,000 units are planned to be completed in 2019 alone.
“What is now required is a relaxation of the requirements of , so that that to help more potential investors enter the market. Further regulation improving, good management and real estate market transparency will also help drive additional demand,” said Craig Plumb from JLL.
Property Finder Group reported recently that in Dubai increased by 33.46 per cent year-on-year, from June to August 2019, when 8,833 transactions were registered in Dubai. To compare, during the same period last year only 6618 property sales transactions were registered in the emirate. Similarly, property sales in Dubai reached a four-year high in value terms. During the summer 2019, the estimated cost of the housing sold in the emirate was worth AED14.94 billion (US$4.07 billion), whereas last year this was AED12.58 billion (US$3.42 billion), an increase by 14.94%.
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