One of Dubai's leading private property developers has predicted that demand for homes and offices in Dubai will continue to exceed supply for the next few years, and said forecasts that demand will cool down in 2008 and 2009 were not based on reality. Mehdi Amjad, President and CEO of Omniyat Holdings and Omniyat Properties, said the imbalance between supply and demand in Dubai's buoyant real estate market is expected to continue well into the next decade with the sector anticipating a new wave of investors from a completely different demographic profile. Speaking in response to increasing speculation about supply and demand figures for the emirate, Amjad argues that with the expected doubling of Dubai's population in five to eight years, massive demand for property will continue. 'The whole bubble theory is a bubble that has been burst,' Amjad said. "We keep hearing that the balance between supply and demand will be realised in 2008 or 2009. People who are saying that are not actively involved in the Dubai market, but just commenting on it from their ivory towers based on their experience in other markets. We all know Dubai is different. Dubai has His Highness Sheikh Mohammed," he said.
Amjad said the Dubai market is hungry for new property and is continuing to absorb new launches even as more and more buildings and are being delivered all over Dubai, a fact that was displayed with the delivery of recent projects such as International City and Jumeirah Beach Residence. "A lot of people were predicting that the release of JBR and before that International City would lead to a decrease in demand, but it was a drop in the ocean! More than 25,000 units in JBR alone were delivered and they were all absorbed into the market without even causing a small dent in demand," he said. Amjad said Dubai is aggressively targeting population growth, and that will lead to growth in demand for real estate. 'The government is building a city for five million people whereas today we have fewer than two. Quite simply, this means that whatever is supplied now will not be enough and won't be for many years to come,' he noted. However, whilst demand will continue to outweigh supply, it will not be as extreme as it has been in the last two years, said the Omniyat chief, adding that Dubai's leaders are pulling out all the stops to find the best solutions to achieve a balance between supply and demand. "The Dubai government is doing all it can to meet the demand. It is making more land available for development and it is controlling the cost of raw materials such as cement. It's attracting new developers and new construction companies whilst also providing facilities and the necessary legislation to protect investors, developers, and home buyers," he said. Amjad said that as more construction capacity comes onto the market and with new players from all over the world becoming involved, more projects will be delivered on time. 'Currently there are a lot of projects which are late because some developers find it difficult to ensure their construction companies remain on schedule. At Omniyat Properties, we manage to do that very well,' he said. "No other country in the world is doing what Dubai is and at such a pace.His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, said recently that those who said that the real estate bubble would burst are now running after it as it vanishes into the sky." And with regard to criticism that many of Dubai's developments have been geared towards wealthy clientele, Amjad explains that this is a normal trend for new real estate markets. "With any market just starting out, there are the pioneers who can afford to take the highest risks. These are the wealthy segment and the products which were offered by developers in Dubai in the early years were designed for this investor, so it was natural that they were more luxury oriented," he said. As the market matured, Amjad pointed out, more and more developers started to look at the middle and lower segments of the market which did not have as much initial demand in the early years as a result of lower income buyers staying away from the Dubai real estate market. "Many developers now have projects catering specifically for this segment and Omniyat Properties will also be launching projects for this market very soon. The government is also doing more to provide mortgage and financial facilities which are important for this group of buyers," he said. Amjad also lauded the formation of Dubai's Real Estate Regulation Authority (RERA) following Dubai's new law No 8 - issued by HH Sheikh Mohammed bin Rashid Al Maktoum - which makes escrow accounts compulsory for all Dubai off-plan developments, with money released only on the order of the Dubai Land Department. "RERA is to be affiliated to the Land Department and tasked with the responsibility of overseeing key areas such as property brokers, trust accounts and owners associations, as well as regulating real estate brokers in an effort to weed out unqualified freelance agents. This is extremely positive move for the market and will see investor confidence go through the roof," he added. Source
Amjad said the Dubai market is hungry for new property and is continuing to absorb new launches even as more and more buildings and are being delivered all over Dubai, a fact that was displayed with the delivery of recent projects such as International City and Jumeirah Beach Residence. "A lot of people were predicting that the release of JBR and before that International City would lead to a decrease in demand, but it was a drop in the ocean! More than 25,000 units in JBR alone were delivered and they were all absorbed into the market without even causing a small dent in demand," he said. Amjad said Dubai is aggressively targeting population growth, and that will lead to growth in demand for real estate. 'The government is building a city for five million people whereas today we have fewer than two. Quite simply, this means that whatever is supplied now will not be enough and won't be for many years to come,' he noted. However, whilst demand will continue to outweigh supply, it will not be as extreme as it has been in the last two years, said the Omniyat chief, adding that Dubai's leaders are pulling out all the stops to find the best solutions to achieve a balance between supply and demand. "The Dubai government is doing all it can to meet the demand. It is making more land available for development and it is controlling the cost of raw materials such as cement. It's attracting new developers and new construction companies whilst also providing facilities and the necessary legislation to protect investors, developers, and home buyers," he said. Amjad said that as more construction capacity comes onto the market and with new players from all over the world becoming involved, more projects will be delivered on time. 'Currently there are a lot of projects which are late because some developers find it difficult to ensure their construction companies remain on schedule. At Omniyat Properties, we manage to do that very well,' he said. "No other country in the world is doing what Dubai is and at such a pace.His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, said recently that those who said that the real estate bubble would burst are now running after it as it vanishes into the sky." And with regard to criticism that many of Dubai's developments have been geared towards wealthy clientele, Amjad explains that this is a normal trend for new real estate markets. "With any market just starting out, there are the pioneers who can afford to take the highest risks. These are the wealthy segment and the products which were offered by developers in Dubai in the early years were designed for this investor, so it was natural that they were more luxury oriented," he said. As the market matured, Amjad pointed out, more and more developers started to look at the middle and lower segments of the market which did not have as much initial demand in the early years as a result of lower income buyers staying away from the Dubai real estate market. "Many developers now have projects catering specifically for this segment and Omniyat Properties will also be launching projects for this market very soon. The government is also doing more to provide mortgage and financial facilities which are important for this group of buyers," he said. Amjad also lauded the formation of Dubai's Real Estate Regulation Authority (RERA) following Dubai's new law No 8 - issued by HH Sheikh Mohammed bin Rashid Al Maktoum - which makes escrow accounts compulsory for all Dubai off-plan developments, with money released only on the order of the Dubai Land Department. "RERA is to be affiliated to the Land Department and tasked with the responsibility of overseeing key areas such as property brokers, trust accounts and owners associations, as well as regulating real estate brokers in an effort to weed out unqualified freelance agents. This is extremely positive move for the market and will see investor confidence go through the roof," he added. Source
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