Dubai's leading private developers believe a balance between supply and demand has been achieved to some extent, and that prices have hit rock bottom and are unlikely to fall further.

Damac: The Market Has Turned the Corner

Hussain Sajwani, chairman of Damac Properties, said the market turned the corner in 2018 as new launches declined.

"We launched only one project each in 2018 and 2019, as compared to 10-12 in 2015. Our new project launches are 90 per cent less now, as we're focused on deliveries. In 2019, we delivered over 6,000 units and plan to handover 8,500 this year and 9,000 next year. I believe that if the supply is stopped for a couple of years, the balance will be achieved between supply and demand," Sajwani said.

He had said earlier that 20,000 homes were sold across Dubai last year, and the developer hopes to sell 1,000 units this year.

"The prices won't get cheaper in 2020-2021. The supply is getting less, and hopefully, in 2022, the prices will get much better," he told CNBC at the World Economic Forum in Davos. "Prices are rock bottom. Today, in Dubai, what you're buying is almost at the cost of the developer or below cost," he told Bloomberg. He said supply had been curbed in recent months, as most big developers were not launching new projects.

Lower Completions Than Projected

Consultancy data show actual supply is lower than projected, while sales rose substantially late last year as falling prices made property more affordable. According to ValuStrat, 24,613 homes were completed in 2019, just 58% of the projected supply. Cavendish Maxwell predicted 50,000 handovers in 2020, but industry players expect the materialisation rate to stay lower because of delays.

Danube: "There Will Never Be Oversupply of Good Property"

Atif Rahman, director and partner of Danube Properties, is not worried about oversupply, believing supply and demand have balanced.

"There can be oversupply in any market. Mumbai is sitting with 170,000 houses and there are no takers. In the Delhi region, there are more than 200,000 houses in the market; and we are talking about a country with a population of 1.3 billion, while the UAE is just 10 million. There will never be oversupply of good property," he said.

He added that a progressive economy attracting fresh investment, people and businesses will create more demand. "Every step that the Dubai government is taking, such liberalisation of trade and immigration reforms are moving towards that direction and will create more demand."

Rahman said the Higher Committee for Real Estate Planning is not going to cap new developments. "Even if they put a cap, we need to respect that. I am sure they must take the decision after a lot of research. You always get judicious and pro-business decision from the government," he said.

He stressed that developers launching new projects must stay responsible for delivering earlier ones. "If a developer is progressing well with construction and delivery of previous project, I don't see any harm in launching a new project. For the last 15 year, we always hear about oversupply, but more than half of Dubai was built over the last 15 years and the supply has been consumed," he said.

Danube plans to launch one more residential project in Dubai before March 2020, and chairman Rizwan Sajan is counting on expats in rented homes to buy it.

"There is still huge scope of new properties as 80 per cent of expats still stay in the rented apartments. They are looking for affordable, value-for-money, good location, and payment plans. If you have put all these together they would certainly be interested," he said.