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Supervision by the new committee to monitor Dubai’s real estate sector and restore balance in the market will prove a boon for the emirate’s economy and will solidify its position as a premium global real estate market, developers and industry experts said.
The emirate, the commercial and trading centre of the Middle East, on Monday formed the "Higher Committee for Real Estate Planning" led by Deputy Ruler Sheikh Maktoum bin Mohammed, to achieve a balance between supply and demand.
Members of the committee include the General Secretariat of the Executive Council of Dubai and Dubai Land Department, the Dubai Media Office said late on Monday.
Semi-government developers such as the emirate’s sovereign wealth fund, Investment Corporation of Dubai, and major developers Emaar Properties and Nakheel will also be on the committee, the office said.
Others include Wasl Properties, Dubai Properties, Meraas, Nshama, Meydan, Dubai Silicon Oasis Authority, Dubai South and Dubai Multi Commodities Centre.
The new body will avoid duplication of projects and bring forward a comprehensive plan to further develop and increase the competitiveness of the real estate sector as it works to restore the balance in the market.
“Controlling supply and demand will be the key to real estate sustainability for the coming years, along with dependence on proper planning,” said Sultan bin Mejren, director general of Dubai Land Department.
Sheikh Mohammed bin Rashid, UAE Prime Minister and Ruler of Dubai, published an open letter at the weekend with six main points that addressed government work and ways to improve Emiratisation, services and the country’s economy, of which real estate is a vital part.
“Creating a more balanced development environment is vital to the current market," said Farhad Azizi, chief executive of Azizi Developments in Dubai.
"This balance can help the economy in many ways, enabling the private sector to play more of a key role in the UAE’s growth and development ambitions.
“This ideology will translate into an economic environment that is conducive to business, innovation and a more refined supply, which in turn will help with attracting investment."
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The UAE property market slowed after a three-year oil price slump that began in 2014.
Concerns about an oversupply of residential and commercial properties in the market also affected investor sentiment and dented real estate prices.
But analysts have forecast a recovery with initiatives such as a new immigration regime offering a long-term visa to investors, the Dh50 billion Ghadan 21 economic stimulus, Expo 2020-related projects and changes to the freehold property law.
Oil prices have also rebounded and are hovering between $50 and $60 per barrel.
“As the industry continues on its road to recovery, key initiatives will undoubtedly help in accelerating the upturn,” said Niall Mcloughlin, senior vice president of Damac Properties, which is listed in Dubai.
“The real estate market is maturing and as a key driver of the economy, the introduction of government initiatives such as this committee will help achieve balance and efficiency, enabling the city’s progress towards its long-term goals.
Lynnette Abad, director of research and data at real estate listing portal Property Finder, agreed.
“This is yet another positive advancement by the government to improve and enhance the state of the real estate market in Dubai," Ms Abad said.
“By focusing on quality projects and working with developers for proper city planning, Dubai will only become more attractive to investors.”
In its report last month, Property Finder said a record number of residential units are expected to come online in the second half of this year. This could push Dubai property prices lower.
A total of 20,978 residential units were completed in the first half of 2019, Property Finder says.
An additional 38,426 units within 152 projects, which have at least an 85 per cent completion status as of July, are scheduled to be delivered by the end of the year.
But “we desperately lack affordable housing”, Ms Abad said.
She said she hoped the new committee would address this issue when planning for the future with developers.
Dubai is ranked the third-most affordable city for “prime real estate”, with average prices of $600 a square foot, Savills' World Cities Prime Residential Index shows.
The index tracks 25 major cities worldwide.