Oversupply in Dubai is a thing of the past and developers should not worry about it as demand is strong and there are no new mega project launches that can cause massive oversupply again in the market, said Rizwan Sajan, founder and chairman of Danube Group.
“There is no oversupply in the market because if that was the case then we would not be selling our Skyz project successfully. Even other developers who have launched their projects are also able to sell them well. It’s because investor confidence in the UAE market has gone up tremendously both from local and overseas investors. That’s why whatever the supply is coming in the market has been successfully sold,” Sajan told Khaleej Times during an interview on the first day of Cityscape on Tuesday.
Danube Properties recently launched Dh475 million Skyz project in Arjan. The developer has already sold more than 50 per cent of the project. Sajan expects to sell around 70 per cent of the project by the end of this month and 100 per cent by year-end. After selling Skyz this year, the developer will launch its next project in the first quarter of 2022.
“For the next few years, any developer should not worry about selling the project because demand is coming in from all over the world. I don’t think we should have any problem as far as selling is concerned. I don’t think oversupply will happen because a lot of people from abroad are investing here. Developers are not launching big projects but one or two buildings and that’ll not cause oversupply,” said Danube’s founder.
Property prices in Dubai have been recovering steadily and are expected to increase by 20 per cent in two years, offering a 5 to 10 per cent annual return on investment. In the last 6 months, prices have gone up by 20 to 30 per cent in certain areas.
“Buyers of the properties can expect to benefit from 20 per cent premium if they sell the property after two years when we will hand over Skyz to the buyers. This translates to a straight 15 per cent annual profit – making it a very high return on investment,” he said, adding that those who’ll shy away from investing, might miss the boat.
“Think of those who bought properties last year when the prices and market sentiment was the lowest in the middle of the pandemic – and made a killing by selling them at 30-40 per cent premium earlier this year – a solid return in just six months,” added Sajan.