Prices in the Dubai real estate market are set to stabilize in 2020, according to Chairman and CEO of DAMAC Properties Hussain Sajwani.
“Today the cost of buying a new property is almost at the cost of construction, so prices I don’t think will go further down, I think it will stabilize,” he said on the sidelines of the World Economic Forum 2020 in Davos, Switzerland.
“There are people willing to buy … people of course in an oversupplied market are hunting for the best deals,” Sajwani added.
Businesses will need to “tighten the belt, lower your debts … don’t spend your cash too much” and survive for two years when “things will be much better,” he added.
Last year, Dubai authorities announced the establishment of a committee to manage supply and demand in the real estate sector. The announcement came as the sector continues to experience an extended period of oversupply and falling prices.
Information from Property Finder, a real estate company, shows that 2019 was a standout year for sales in the sector, growing 20 percent year-on-year.
Dubai’s Expo 2020 is also due to take place later this year, which many analysts suggest will have a positive impact on the sector. “Going into 2020 and leading up to the Expo, we should continue to see transaction levels increase and prices start to stabilize in certain areas. We have already started to see certain market dynamics shift as a direct effect from Expo,” said Lynnette Abad, director of data and research at Property Finder.
On the effect that rising geopolitical tensions following the assassination of top Iranian military commander Qassem Soleimani in January, will have on the real estate sector, Sajwani said, “The region is used to political instability, unfortunately, and I think the business is normal, people see those ups and downs and the political instability, people just live with them.”
