According to real estate developers, the demand for new properties in the Dubai real estate market is consistently high, meaning there is no oversupply.
Developers and executives in the real estate sector dismiss any worries about excess, stating that the steady increase in residential property prices is evidence that the market is not oversupplied.
“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.
“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.
In many parts of Dubai, particularly Palm Jebel Ali, Business Bay, Downtown, and Dubai Marina, prices have risen to all-time highs.
According to the Allsopp & Allsopp Market Snapshot for October 2024, the average price of real estate has increased by 75% for villas and townhouses, and 55% for apartments, year over year.
According to the Dubai Land Department, sales transactions in October surpassed 20,460 units for the first time ever, demonstrating that Dubai’s real estate market is still outperforming forecasts. This represents an unprecedented 82% year-over-year increase.
“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 percent 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 percent. 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 spending Dh1.2 billion on three projects: two in Al Jadaf and one in Business Bay.
“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.
