Dubai property oversupply claims are false, says agent
Data from Allsopp & Allsopp shows many are still buying
Claims of an oversupply in Dubai’s property market and too many developments in the pipeline are “patently false”, according to the boss of one of the emirate’s estate agencies.
Lewis Allsopp, CEO of Allsopp & Allsopp, said the agency is already beginning to see demand outstrip supply as the availability of listed properties for sale declines.
“Dubai’s year-on-year population growth of 7% requires at least 75,000 new properties coming online each year. New developments becoming available is essential to support the growing population,” he said in a statement.
Many developers in the market have either slowed down construction or delayed the launch of new projects this year. But with demand continuing at peak levels and a shortage of supply, Allsopp predicts an increase in property prices.
“Under current market conditions, we’re regularly seeing desirable properties listed at an achievable price receive multiple offers from buyers. This shows the real strength of the market and has the combined effect of keeping supply tight, demand high and, as we’re starting to see, prices increasing.”
Buyer registration and sales data from Allsopp & Allsopp shows many people still buying, with February recording the highest sales volume since the company started in 2008. The month saw a 62% increase in buyer registration compared to February 2015.
Although oversupply would be a prime indicator of the market being in trouble, what is currently being observed is the opposite scenario, Allsopp said. “We’re actually struggling to find units for the demand. Thankfully the developers are aware of the current situation and we still have properties due to come online this year despite some projects being held up.”
According to Allsopp & Allsopp’s February sales figures, 52% of the properties it sold last month were on the market for less than two weeks.
“The reality is, even if there is a lot of units being built, there still isn’t a lot of choice for the end-user,” Allsopp said.
Other industry figures have also hit back at claims of oversupply. Damac Properties MD Ziad El Chaar in October noted that the number of units that some property consultancies forecast were due for handover was grossly inflated.
