Dubai realty weighed down by luxury launches

 

Dubai: If the pace of new project launches is maintained, it could set off an imbalance in Dubai’s property market within five years, according to a new report issued by Phidar Advisory, a consultancy.

“In the base case scenario, assuming an average GDP (gross domestic product) growth of 3.4 per cent and residential demand CAGR (compounded annual growth rate) of 4.6 per cent, if all of the announced projects are completed, the market could achieve a 7 per cent oversupply in five years,” the report states.

“If stalled projects restart, the projected oversupply increases. Even a more bullish scenario of 4.1 per cent average GDP growth rate cannot absorb all potential supply expansion, including under construction, launched, announced, and stalled projects.”

The ‘disequilibrium’ will be particularly severe in the top end of the market. This will have consequences for Dubai’s typical high networth investor base and their acquisitions of multiple high-end properties.

 

Read more at Gulf News.