Dubai property market is unlikely to experience an oversupply over the next four to five years, even with numerous launches in recent years, as high demand is expected to absorb the new supply.
Rizwan Sajan, founder and chairman of Danube Properties, said there is a large amount of supply which will come to the market, but similarly, the number of investors which are coming to Dubai are very high.
“Supply will be available, but there is a significant number of people who want to make Dubai their second home. I believe that once the gaming resort in Ras Al Khaimah opens in the next few years, the influx of tourists to Dubai will be massive,” Sajan said in an interview with Khaleej Times.
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He added, “As a result, Dubai will require a large number of properties and Airbnb-style facilities to accommodate this rush. I don’t see an oversupply in the next 4-5 years, because the opening of the gaming resorts will likely double the number of tourists. Many property owners will list their homes on short-term rental platforms.”
He also mentioned that not all the visitors will opt to stay in Ras Al Khaimah, but many will visit the gaming facilities there but come back to Dubai.
“Additionally, Ras Al Khaimah doesn’t have enough number of properties and rooms available to accommodate the influx, so Dubai will greatly benefit from this,” he added.
As reported by Khaleej Times in August, work on the multi-billion dollar Wynn Al Marjan Island project, a joint venture with the US-based Wynn Resorts, is progressing at a rapid pace and it is scheduled to open in Ras Al Khaimah in 2027. It will be the first integrated gaming resort in the region.
Additionally, US-based MGM Resorts’ CEO and president Bill Hornbuckle announced plans to build a gaming resort in Dubai during the Skift forum.
Dubai’s real estate market has experienced a surge in new projects in the post-pandemic period, especially during 2023-2024, when many new mega projects were launched by local developers. Many foreign developers have also entered Dubai’s real estate market, launching small-scale projects.
According to preliminary numbers released by Cavendish Maxwell’s Property Monitor, developers are aggressively launching projects, averaging more than one launch every day in the first quarter of 2024 in Dubai. In March 2024 alone, nearly 30 off-plan projects were launched, adding 10,000 units to the market for sale.
Despite the rally in property prices in the past three and a half years, the Danube Properties chairman ruled out that prices have gone beyond the reach of a large number of investors. “Property prices in Dubai are still much cheaper than many large cities around the world. We are still under-priced as compared to many global cities,” said Sajan.
According to Savills Research, the average property price in Dubai is $800 per square foot, compared to $4,000 in Hong Kong, $2,600 in New York and Geneva, $2,100 in Shanghai, $1,900 in London, $1,800 in Singapore, $1,600 in Los Angeles and $1,100 in Mumbai.
Challenges for developers
As construction continues at an exceptional pace, the Danube Properties chairman highlighted that the main challenge for developers is finding reliable contractors. “For us, every contractor wants to work with Danube Group. Plus, one of Danube Group’s subsidiaries also supplies building material which is an added advantage and ensures timely completion of projects.”
He also noted that smaller developers face difficulties in selling their units as quickly as large developers like Danube, which is among the top 10 developers in Dubai in terms of units. “Smaller developers are selling, but it may take more time.”
Since its launch, Danube Properties has unveiled dozens of projects across Dubai worth Dh26 billion. Recently, it launched 2 new developments: Bayz102 in Business Bay and Oasiz in Dubai Silicon Oasis.
The 102-level Bayz102 will be the tallest in Danube’s portfolio and a landmark addition to Dubai’s skyscrapers.
One of the most groundbreaking features of Bayz102 is the integration of a helipad for air taxis. This futuristic mode of transportation is expected to revolutionise travel within the Emirates, offering a swift and convenient alternative for both residents and visitors.
In addition, Bayz102 will feature retail outlets and more than 40 amenities designed to enhance the lifestyle of its residents.
“Bayz102 by the Danube represents a new era in luxury living. We are thrilled to introduce this project, which not only sets a new benchmark for high-rise living but also paves the way for the future of urban transportation in Dubai. As the city prepares to embrace sky taxis, we are proud to be at the forefront of this innovation, offering residents the convenience of cutting-edge mobility right at their doorstep,” said Rizwan Sajan.
Danube Properties is currently scouting for a few more plots in prime and affordable areas to launch new projects in the coming months.