According to a prominent Emirati property developer, Dubai’s real estate market has hit a “rough landing,” but reduced prices may be a favorable moment for investors seeking to purchase.
“We had a downturn in the economy, and things were already going down in the real estate market since [2018 and 2019],” said Hussain Sajwani, president of Damac Properties. “We were on our way to a gentle landing… then Covid turned it into a harsh landing.”
The Dawn of Buyer’s Market
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He told CNBC’s Hadley Gamble on Wednesday that this is a “wonderful moment” for individuals to purchase real estate in Dubai, estimating that resale apartments may cost 10% less than new developments at this stage.
As the city recovers from the epidemic, he believes the market will stay low for the next two years.
“For [2021 and 2022], I still anticipate a soft market,” he added. A soft market is one in which there are more prospective sellers than buyers, implying that prices will decrease. Because buyers have greater negotiating power in talks, this is often referred to as a buyer’s specific market.
Residential property prices in Dubai dropped 12.3 percent year over year in January, according to consulting company ValuStrat, but they increased 0.1 percent from December.
In the present climate, Damac Properties, according to Sajwani, is unlikely to launch many new projects.
“We’re going to continue to be very cautious,” he added. “We aren’t going to launch a lot of initiatives; in fact, we aren’t going to launch any at all.”
According to him, there has been some interest in the property, but it has been chiefly focused on luxury villas ready to move into.
According to statistics collected by Johns Hopkins University, the coronavirus Covid-19 seized the globe by storm in 2020, infecting more than 109 million individuals worldwide and killing at least 2.4 million people. The epidemic wreaked havoc on the world economy, with few sectors escaping its wrath.
Last year was “no time for people to purchase property,” according to Sajwani, who cited the epidemic and subsequent lockdowns as examples.
Nonetheless, he believes prices will ultimately recover and that the city would emerge stronger from the catastrophe.
“In the long run, I am extremely optimistic about Dubai… “Supply will decrease, and property prices will rebound, and rebound strongly,” he said.
Key Points
- According to Hussain Sajwani, chairman of Damac, Dubai’s property market has hit a “rough landing,” but reduced prices may be a favorable moment for investors seeking to purchase.
- He believes that this is a “wonderful moment” for individuals to purchase real estate in Dubai, predicting that resale apartments may cost 10% less than new developments.
- As the city recovers from the epidemic, the market is expected to stay sluggish for the next two years, according to Sajwani.