Dubai Housing Needs Fixing to Avoid Credit Crunch

The Dubai housing market is experiencing a glut, and it needs to be fixed by stopping all new home constructions for at least a year, Hussain Sajwani, the chairman of Damac Properties PJSC told Bloomberg.

What Happened

The Gulf city housing market has slowed down in the last five years, with prices falling by about 35% since the middle of 2014, research from Swiss investment bank UBS shows. The researchers tied the slowdown in the Dubai real estate market to the weakened oil prices. As of 2017, oil industries remained, by far, the largest contributor to the United Arab Emirates’ GDP, accounting for approximately 30%, according to government data.

But the data from Dubai-based Property Finder Group shows that there were 18,858 real estate transactions completed in Dubai between January and Sept. 30, 2019.

By comparison, developers in Dubai will deliver 30,000 new homes by the end of the year, according to real estate broker Jones Lang LaSalle JLL.

In September, Prime Minister of the UAE, Sheikh Mohammed bin Rashid Al Maktoum, ordered the creation of a committee to fix the oversupply in the market.