(MENAFN- The Arabian Post)

Dubai's property market is grappling with a widening supply-demand gap, as the number of completed units lags behind the increasing volume of new project announcements. While developers continue to launch projects at an accelerated pace, experts warn that this could lead to a critical imbalance in the coming years.

According to real estate agency Allsopp & Allsopp, a significant discrepancy is emerging between the number of new developments being announced and the actual completion of these units. The rapid expansion of apartment-focused projects, particularly in high-density areas, is contributing to concerns about a potential oversupply. This imbalance, coupled with a growing scarcity of villas and townhouses, could reshape the Dubai real estate landscape.

The rapid pace of new project launches is not necessarily translating into faster delivery. Industry experts point out that delays in construction timelines, labour shortages, and rising costs for building materials have slowed the completion of many announced projects. These factors, combined with the market's heavy reliance on apartment developments, are creating a distorted housing supply, leaving a gap in the demand for larger, low-density properties.

Real estate analysts are observing an increased concentration of apartment developments in specific areas, primarily in central business districts and emerging urban zones. However, there has been a notable decline in the availability of villas and townhouses, which are traditionally in high demand among families and expatriates seeking more space and privacy. This trend is especially evident in popular residential communities, where villas are becoming harder to find, pushing prices higher and limiting options for potential buyers.

Dubai's housing market, which saw significant growth over the past few years, is now encountering challenges as the city grapples with this misalignment between supply and demand. The influx of foreign investments, a recovering global economy, and a shift towards remote work have contributed to the high demand for both residential and commercial properties. However, developers' increasing focus on apartment blocks is raising concerns about overcrowding in certain areas, particularly in urban zones where green space and amenities are already stretched thin.

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The government's vision for the city's real estate market includes a diverse mix of housing options, with an emphasis on sustainable urban development. However, some critics argue that the heavy focus on apartment living could undermine these efforts. The need for balanced development that includes more villas and low-rise housing is being increasingly recognised, especially as the demand for spacious homes grows in response to changing family dynamics and lifestyle preferences.

Several developers have responded to these concerns by shifting their focus towards villa projects, but industry insiders say that the shift is not yet widespread enough to counteract the prevailing trend towards apartment construction. Additionally, the rising costs of land and materials have made the development of larger properties less financially viable for some builders, further exacerbating the issue.

The market dynamics are further complicated by the growing interest in luxury real estate. High-net-worth individuals are increasingly investing in upscale properties, both as primary residences and second homes. However, the luxury sector has its own set of challenges, including limited availability of prime land and increasing competition for high-end developments. This has led to a skewed supply, with an oversupply in some sectors, such as apartments, while others, including villas and townhouses, are seeing a shortage.

As the gap between announced projects and completed units continues to widen, some experts are predicting that the market could face a period of stagnation, particularly in the apartment sector. The challenge for developers will be to balance the supply of high-density units with the demand for more spacious, low-density living options. Failure to do so could lead to market volatility, affecting both developers and buyers.

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