Developers and other real estate investors need to slow down their housing projects to balance the market after supply sharply exceeded demand in some areas, Dubai’s deputy ruler was reported on Wednesday as saying.
Sheikh Hamdan bin Rashid Al Maktoum, the UAE’s Minister of Finance, said the real estate sector in the UAE had been hit by the 2008 global fiscal crisis and a surge in supply in the outskirts in such key cities as Dubai and Abu Dhabi.
While the supply to demand ratio was nearly 90 per cent inside towns, it did not exceed 20 per cent in the outskirts, he said.
He attributed this to a sharp rise in supply in suburban areas and people’s preference to live inside the city to be close to their work offices.
Quoted by the Dubai-based Arabic language daily Albayan, Sheikh Hamdan said he expected an improvement in the near future due to a project rise in the influx of expatriates coming to the UAE for work, business or tourism.
“But generally we hope that supply in housing will not increase in the current stage so there will be a balance with demand and the sector resumes its full activity…we hope developers and investors will not increase their housing and commercial units until we see a relative stability in the present political situation in the Arab countries which have witnessed tensions recently,” he said.
“Certainly, these conditions affect any new projects and consequently the real estate sector in the country…this is because the UAE has commercial and economic relations with those countries…we expect that after the regional situation stabilizes there will be several projects that will stimulate the real estate sector in Dubai and other parts of the UAE.”