Real estate demand to continue, firm claims

Numerous reports over the last year suggest property prices in Dubai are headed for a significant correction. (Getty Images)

Demand for real estate in Dubai will continue despite criticism that the market is reaching saturation point, the CEO of a Dubai-based developer said on Wednesday.

Countering concern that supply of buildings could soon surpass demand, Mohammed Nimer, CEO of MAG Property Development, said he believes this is not a risk.

"Some records say Dubai needs around 45,000 units a year. I believe demand will continue," Nimer said in a press conference at the Cityscape real estate expo in Dubai, explaining demand will cover arrival of newcomers to the emirates as well as people wanting to expand their businesses.

He projected the increase of real estate prices to be 25% for at least the next 10 years.

Nimer made the comments as he unveiled details of four new projects worth a combined 500 million dirhams ($136.1 million).

These include a 27-floor Matex office building, worth 300 million dirhams, located at Business Bay, and a 23-floor residential building worth 115 million dirhams at Jumeirah Village.

The other two buildings, which have a combined value of 100 million dirhams, are two buildings of nine floors each, which will be located in International City.

All four of these projects will be complete by the end of 2009, Nimer said.

Asked whether he considered standards of residential housing in Dubai to be adequate, Nimer said that while in previous years there had been some bad jobs, this was less true of projects today.

"I believe the standard is adequate. In general, we are all within the standards," he said.

"People are more aware that laws will stop you from doing that. The developer or contractor knows that if he doesn't do a proper job he will be penalised," he added.

MAG said that the new projects took the total value of its property portfolio to over 3 billion dirhams.

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