By Staff writer
Allsopp & Allsopp CEO says demand is outstripping supply in Dubai, with 52% of properties sold within two weeks
The head of one of Dubai’s largest real estate brokerages has dismissed recent reports claiming an oversupply of property in the emirate, saying demand is currently outstripping supply.
The reality of Dubai's property availability does not match reports the market is oversaturated, said Allsopp & Allsopp CEO Lewis Allsopp in a statement.
Allsopp & Allsopp said its buyer registration and sales data shows many people are still buying, with February recording the highest sales volume since the company started in 2008, and a 62 percent increase in buyer registration on the same month in 2015.
Its figures showed that 52 percent of the properties it sold last month were on the market for less than two weeks.
He said many developers have either slowed down construction or delayed the launch of new projects this year due to a slowdown in the local economy and continued low oil prices.
Allsopp said that reports indicating too many developments in the Dubai pipeline were "patently false", adding that demand is continuing "at peak levels and continued low supply".
Allsopp also predicted this will lead to an increase in property prices, bucking the recent trend of falling prices and stagnating rental values in Dubai.
"Claims there is an oversupply of property and too many developments in the pipeline are patently false, as we are already beginning to see demand outstrip supply as the availability of listed properties for sale continues to decrease," he said.
"Dubai's year-on-year population growth of seven percent requires at least 75,000 new properties coming online each year. New developments becoming available is essential to support the growing population," he added.
Allsopp said: "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."
He added: "Oversupply would be the first thing to show the market is in trouble but the fact is we are facing precisely the opposite scenario - 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."For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
I can agree with this, I am trying to buy a unit in the ranches but every advert I respond to on a major listing site, the unit has mysteriously 'just been sold' and the agent can offer me one elsewhere. In the community I want to be in at the Ranches I have only been able to find 2 units, both of which have offers on them above the listed prices online for similar units.
"Dubai's year-on-year population growth of seven percent requires at least 75,000 new properties coming on-line each year."
Shows how in tune the realtor is with the real face of Dubai. Most of that seven percent growth are from blue collar workers, for whom spending hundreds of thousands of dirhams for a property is unrealistic, and are quite happy to either share or live in the accommodations in neighbourhoods like Ghusais, Karama or even Sharjah.
Don't also forget for all that inflow, there sure is a lot of outflow. The evening rush out by car or metro from the DIFC seem to be an awful lot thinner compared to a year ago. Ditto for the DMCC
Dubai's current population today is ~2.5 million, having grown at a rate of ~4.7% from 2014, resulting in addition of just over 110,000 people (source: Dubai statistics centre). Based on a recent Colliers report and data from DSC, the average household size in Dubai is ~4. Therefore, this population growth we saw resulted in ~28,000 new families.
So this guy is off by a factor of almost 3 when it comes to what the demand pipeline is really looking like.
many listings on property sites are not real. the agents just wants to have a buyer and their budget details and hope to match up with some seller. Also areas like Ranches are much established areas and will have comparatively less units on sell.
I honestly think people are finding holes in these quotes because they want the prices to fall! Which if your buying is understandable, however how can anyone hide from the fact the Dubai population has grown so much over the course of the last few years! 'Blue collar' or not they still need somewhere to live so this man quoting is correct.
Mazher, perhaps you need some help with your mathâ€¦. I previously worked with one of the leading research groups in Dubai and you cannot use that logic to broad brush demand.
Subtract the following from your 2.5 mill.
â€¢\tLabour class â€“ approx. 500,000
â€¢\tFilipino â€“ they never buy â€“ 50,000
â€¢\tLow Paid Asian workers â€“ 500,000+
â€¢\tUAE Nationals â€“ approx. 250,000 â€“ most of whom the new supply is not aimed at
â€¢\tWhite Collar Expats â€“ over 500,000 â€“ many of whom have no interest or deposits to purchase
â€¢\tCurrent owners who do not plan on buying a 2nd property â€“ approx. 50,000
I could go further but the actual amount of qualified residents (expats) who could afford to buy is shockingly low â€“ in fact it was so low that most developers chose to no believe the numbers.
Only the naÃ¯ve would believe that the Dubai market is great.
So the other guy was not off by a factor of 3 â€“ you both were just using the wrong numbers to start.
and if one includes how many people chooses to stay in Northern Emirates (Sharjah/Ajman) and commute to Dubai daily, and those who stays in Labour Camp (a bulk of them) this factor would increase by 13.
More over Freezone areas is just one part which adds house units, a very large area of non-freezone adds much more units every year.
@Khallam, No, please not again. We got tired of hearing that song in the previous crash.
@Scott, I think Mazher's maths are OK. He is stating that the 75,000 households quoted by the realtor is 3x what he (Mazher) estimates. You are both agreeing essentially. Maybe the issue is more on the reading side.
Yes the numbers quoted are wishful thinking, we (almost) all know this. Just check Al Qassim's comments on this same website
This place has an unhealthy fixation with real estate.
I am trying to sell an apartment in a "good" location but have been very disappointed in the agent. I have lowered the price twice and now have withdrawn the property. I would only have got what I paid in 2007 or less plus good quality furnishings and furniture thrown in. I am hoping for a better sale in a few months. I have not been in Dubai to "watch" the agent and I do not think he has worked hard to sell it.
Obviously it's not that good of a price or location or is rented. check the stats, Allsopp & Allsopp are the Number 1 agent in Dubai for sold properties according to the DLD Govt app ' Dubai Brokers'. so don't think they are to blame.