Slowdown can be seen as a natural move due to subdued market conditions
Private sector developers lead while government-backed firms are going slow in terms of new project launches in Dubai, with increased focus on ongoing projects and delivering them on time.
Year-to-date, three private developers - Danube Properties, Sobha Realty, and Samana Developers - have publicly announced the launch of their projects worth over Dh800 million in total value, while some are in the planning stages. However, government-backed property giants - barring Emaar Properties - stay silent, focusing mainly on the completion and deliveries of ongoing projects.
Overall, the slowdown in new launches reflects that the emirate's property market is fast heading towards a demand-supply balance. The emirate had established the Higher Committee for Real Estate Planning in November 2019 to bring balance between supply and demand and the current market trend reflects that the sector is heading in the right direction. The committee is monitoring and limiting the government-related entities' supply in order to provide more opportunities to private sector developers.
"Government developers have massively slowed down with new launches. However, Emaar launched a few projects since the start of the year. Surely, there are no new launches of mega projects or new master communities," said Firas Al Msaddi, CEO of fam Properties.
Faraz Ahmed, research manager for Mena at JLL, said that there has been a slowdown in projects being launched from around 18,000 units in 2018 to just 8,000 in 2019.
"The slowdown can be seen as a natural move due to subdued market conditions, and in response to the Real Estate Planning Committee announced in Q3 2019, which aims to introduce measures to improve the balance between supply and demand. Developers are also responding to the need for lower levels of future supply and have changed their focus towards their existing inventories. We can expect lower levels of new launches until market starts improving and sales activity picking up," said Ahmed.
Atif Rahman, director and partner of Danube Properties, said that the Dubai Government is very proactive when it comes to controlling and regulating the sector or creating a catalyst for the market.
"The time since the committee has been formed, the government is trying to regularise the supply and at the same time, they've come up with many initiatives to boost demand. All put together, price is slated to go higher. Therefore, this is right time to buy because government initiative is helping to regularise the supply," he said.
Danube Properties on Wednesday launched Dh400 million Olivz, a master-planned cluster of buildings offering 741 residential units and a number of retail and recreational facilities. Located in Al Warsan First, project will house 741 apartments. It offers studio from Dh299,000, one-bed apartment at Dh475,000 and two-bed at Dh699,000. The project is scheduled to complete in early 2022.
With Olivz, Danube Properties development portfolio grows to 6,194 units, with a combined development value exceeding Dh4.5 billion.
"The launch of Olivz reflects our growing confidence in Dubai's real estate market, which never ceases to amaze investors. The launch is timed well to meet the needs of the growing number of end-users who are now more confident to buy their dream homes," said Rizwan Sajan, founder and chairman of Danube Group. "We have seen demand picking up in the last few months as we sold out all our previous projects - that necessitated the launch of Oilvz."
He said that the Dubai property prices will not stay at current level for long. "Dubai is among the cheapest in the world but one of the best for infrastructure. When compared to New York or London, prices here are cheaper by 4-5 times," Sajan said at the launch of the project.
According to the Global Property Guide, residential property prices in Dubai fell 4.05 per cent in 2019, an improvement from decline of 8.22 per cent in 2018.
According to Knight Frank's latest data, Dubai is third most economical city for prime property among the top 20 cities worldwide. Investors can buy 154.7 square metres (sqm) of prime property for $1 million. This is compared to just 16.4 sqm of prime property in Monaco, 21.3 sqm in Hong Kong, 30.4 sqm in London, 32.2 sqm in New York, 35.5 sqm in Singapore, 44.6 sqm in Paris and 102.2 sqm in Mumbai.
On Wednesday, Sobha Realty also announced the launche of Creek Vistas Reservé Tower in Sobha Hartland. Scheduled for handover in March 2023, the 33-storey luxury tower features 330 one and two bedrooms apartment with prices starting from Dh876,000 onwards.
Jyotsna Hegde, president of Sobha Realty, said Hartland has proven to be very successful in drawing the strong interest of Emirati, Arab and international buyers.
Hailing the Dubai Government for its pro-active approach towards real estate, especially private developers, she said: "From policy announced to implementation of policy, it takes so little time and it gives businesses a lot of safety. We know what is said by the leadership will be implemented and achieved."
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