(MENAFN- Khaleej Times)
Dubai property market requires an additional 10-20 per cent supply to curb the rising rentals and enhance affordability in the city, according to a senior industry executive.
“Dubai essentially needs extra 10-20 per cent more units than the current demand because the rising rents are making it increasingly expensive... There is an undersupply, as new launches are being sold out within a day," said Imran Farooq, CEO of Samana Developers.
He further noted, "We sold 80 per cent of our stock in 72 hours. When the top developer sells out in just 4 hours and the seventh largest does so in 3 days, it shows the demand is significantly outpacing supply. This trend will persist because Dubai continues to perform exceptionally well."
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Rents have been steadily increasing over the past few years, driven by strong demand from property buyers and tenants.
As reported by Khaleej Times, big developers have been selling out their inventories in hours while new and smaller developers are managing to sell their units in days , underscoring the supply-demand imbalance.
Imran Farooq
Major local developers such as Emaar Properties, Nakheel, Damac Properties, Danube Properties, Samana Developers Binghatti and Sobha Group have been the leading contributors to Dubai's property market, collectively accounting for around 90 per cent of new launches.
Nearly 86,000 off-plan units have been launched in the first 8 months of this year and another 35,000-40,000 are set to hit the market in the last four months, taking the tally to 126,000 for the whole year, according to the latest Property Monitor report released by Cavendish Maxwell.
This influx of new properties is anticipated to come online over the next few years, which could help ease the rising rental and property prices. However, industry experts continue to highlight the current undersupply, predicting that it will take several years for supply and demand to balance out.
“Landlords are not concerned because properties are being rented quickly at market rates, and within a week, they can rent for Dh5,000 more," shared Imran, emphasising the need for stability in the market.
"To make Dubai more affordable, we need to increase supply, as the market is currently undersupplied. The rise in rents need to stop."
He also pointed out that the top 9 developers are responsible for 90 per cent of sales.“All the developers are doing a good job. We are No.7 with a 4.5 per cent market share. It has to be mainstream developers who will have to step up further. All developers are at full capacity and putting more pressure becomes financial risks,” he added.
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