Developers and other real estate investors will have to slow down their housing projects, so as to bring about a balance in the market, following sharp supply which exceeded demand in few areas, said Dubai’s Deputy Ruler on Wednesday.
The UAE Minister of Finance, Sheikh Hamdan bin Rashid Al Maktoum, mentioned that the Finance Minister said that real estate sector in the UAE was hit during the 2008 global economic recession, while there were increased supplies in the outskirts of major cities like Dubai and Abu Dhabi.
The supply to demand ratio was almost 90percent within towns, but, it did not exceed 20 percent in the outskirts. This is largely due to increase in supply in suburban areas, as people prefer to live within the city, considering proximity to work places, the Minister said.
This has been largely due to sharp growth in supplies in suburban areas, as people prefer to live within the city, in proximity to their work offices.
Sheikh Hamdan said that an improvement is expected in the near future, owing to growth in projects and due to increased expatriate influxes into the UAE for work, businesses or tourism purposes.
However, the supply in housing will not increase at present, and so there will be a balance with demand, and the sector resumes its full activity. Hence, it is hoped that the investors and developers will not further increase housing and commercial units, until a relative stability is noticed in the present political situation in Arab countries that have already witnessed tensions recently, he said.
Such conditions can affect any new projects, and thereby, the real estate sector in the country. Once, the regional condition stabilizes, there will be several new projects coming up, which stimulates property sector in Dubai and other parts in UAE, he concluded.