Competition is heating up in Dubai's property market as new developers enter the scene to launch projects amid surging demand from buyers.
Amaal – founded by Abdulla Lahej, former group chief executive of Emaar – made its debut in the Dubai market this year, alongside Kasco Developments, Acube Developments, Source of Fate and PO B1 Properties.
“Of the 40 new developers that have come to market so far this year, approximately 50 per cent are foreign entities entering the Dubai market for the first time," says Zhann Jochinke, chief operating officer at Cavendish Maxwell’s Property Monitor. “Competition is fierce. So far this year, 142 developers have launched projects, whereas, for the whole of 2023, the figure was 125."
Amaal unveiled a Dh1.5 billion ($408 million) project named Amaal 8 in Mohammed bin Rashid City. The project will have 512 units and the first phase is already sold out, with the development set to be completed by the end of 2028, says Mr Lahej. "We have a variety of customers, not only from this region, from all around the world."
chief operating officer, Property Monitor
The company plans to hold road shows in China, Australia and the UK to attract more customers. New developers entering the market "fosters a healthy competitive environment, which benefits everyone involved", he says. "It's good not to make it only for three or two developers, it becomes a monopoly."
Dubai-based Source of Fate, which is behind a Dh500 million project in Ras Al Khaimah, is to launch Dh10 billion worth of projects in the next 12 months. The new developments to be built in Ras Al Khaimah and Dubai, with the company fully funded, general manager Majid Hsiung says.
Meanwhile, PO B1 Properties, the new real estate development division of Saif Al Ghurair Real Estate Group, announced a Dh206 million project in Dubai Silicon Oasis that is set to be completed in the second quarter of 2027. The project, named Serenova, spans 7,850 square metres of land and comprises 222 apartments.
Acube Developments, meanwhile, has plans to launch three or four projects worth Dh1.5 billion in 2025, in Dubai and Ras Al Khaimah.
Kasco Developments, part of the family-owned Kasco Group with a diversified portfolio, also unveiled a Dh500 million project in Business Bay. “Despite the increased competition in the market, there is still plenty of opportunity for new companies to establish themselves,” says Mustafa Al Kaissi, chairman of Kasco Developments.
The focus should be on “developing unique and innovative products that meet the specific needs and preferences of consumers", he adds. "This approach allows new entrants to carve out their own niche and succeed even in a crowded marketplace.”
Room for more
The entry of the new developers comes as the UAE property market continues to perform strongly on the back of new initiatives from the government, such as residency permits for retired and remote workers, and overall growth in the economy.
During the third quarter, average prices in the Dubai residential market rose by about 20 per cent from the previous year, with a 19 per cent increase in average apartment prices and a 23 per cent rise in average villa prices, a report from CBRE shows.
In the nine months to September 2024, the total number of residential transactions in Dubai topped 125,000, up more than 36 per cent compared with the same period in 2023, while the total value of deals rose 34 per cent annually to Dh314 billion, the report said.
Demand for real estate is at record levels. Cavendish Maxwell’s latest Property Monitor report shows that more than 20,000 property transactions took place in October – the highest monthly figure on record – with 73 per cent being off-plan units.
The market “definitely appears to be there” for new entities to enter as “we keep hitting kind of new records in terms of sales volume and sales values”, says Matthew Green, head of research – Mena at CBRE. "From a risk perspective, it's a higher point on the risk curve given we're four years already into an up cycle. But looking at the transaction volumes and values, demand is still very much kind of sustained and the Dubai success story only really continues to progress."
Luxury pull
One segment specifically seeing a boom is luxury residential property. In the third quarter, the prime villa market in Dubai recorded capital gains of 38.1 per cent annually, while premium apartment values rose 24.7 per cent during the period, a report from ValuStrat says.
Demand is coming from ultra-high-net-worth people moving to Dubai. Global high-net-worth individuals are expected to spend $4.4 billion on Dubai property this year, up 76 per cent compared with last year, Knight Frank said in a report this year.
Dubai's luxury home market hit record levels in 2023, as sales of homes worth more than $10 million nearly doubled to $7.6 billion, performing better than London and New York, Knight Frank said a separate report.
"Although the Dubai real estate market is seeing sustained growth and expansion like never before, units are still largely being absorbed in a timely fashion," Mr Jochinke says. "Large and well-known developers are selling most of their inventory on launch day or in the days and weeks that follow. Newer, lesser-known developers take longer to sell but, nonetheless, are selling."
Aldar Properties this year said it sold the first two phases of its Athlon project in Dubai within 48 hours of launch, generating Dh4.1 billion in sales for the company.
In September, Samana Developers sold its two projects Samana Ocean Pearl 1 and Samana Ocean Pearl 2 on Dubai Islands, within two hours of its launch.
Protection for investors
From the regulatory side, the requirements are more stringent. Developers must meet certain requirements before they register a project and launch it for sale. One key requirement relates to project finance and providing a level of protection to investors.
"Before off-plan sales can begin, developers must provide a minimum 30 per cent guarantee, either by completing the equivalent of 30 per cent of construction, providing a bank guarantee of 30 per cent of the construction, or depositing the equivalent of 30 per cent cash in the Rera [Real Estate Regulatory Authority] escrow account," Mr Jochinke says.
Looking ahead, Mr Lahej expects investor demand to continue, with sales momentum continuing into the next year. "Seeing the ups and downs of this whole experience of real estate from 2008 and later on in 2012, Dubai always comes on top," he adds. "We are hoping this kind of momentum continues and we see all the positive signs of it so far. I think it's going to be there for some time."
