The Higher Committee of Real Estate in Dubai will be playing a more pro-active role in tracking and regulating real estate oversupply as per reports. The Higher Committee of Real Estate was formed after the announcement made in September, 2019. It is chaired by Sheikh Maktoum Mohammed bin Rashid Al Maktoum, the Deputy Ruler of Dubai, and also comprises of several senior members who are representatives of leading real estate developers in the Emirate.
The committee will aim at bypassing any duplication of real estate projects in the market in the near future. As per studies, approximately 35,000 residential units, encompassing both apartments and villas, were delivered in Dubai for 2019. This is the highest volume of units delivered as per several experts and approximately 80,000 units may be delivered in 2020 itself. Yet, experts are still taking a materialization rate of 50% into account. Even if this happens, a whopping 40,000 new units will still set a record for real estate deliveries in Dubai.
Some other vital aspects worth noting
There have been some delays observed with regard to handing over real estate projects as per experts. Some delays may be attributed to the Government’s efforts to hold back a few realty projects while phasing out deliveries and handovers alike. Experts have also stated that any new real estate project, whether it is from big real estate developers or smaller counterparts in the industry, is required to pass through stringent approval mechanisms prior to decisions being taken on whether they will finally be built or not.
Studies have shown that there are numerous projects which have been paused and these may not eventually be finalized. The committee has been more active with regard to the issue of controlling and regulating real estate supply levels. In spite of the upcoming influx of real estate units, a major chunk of which are in relatively newer city areas, there will be higher demand consistently observed in areas of the city which are perennially popular, including Downtown Dubai. Experts feel that people wish to live in close proximity to their workplaces and also near the schools of their children. Demand will continue to be strong in locations which offer ample social infrastructure.
What developers feel
Several leading real estate developers in Dubai have opined that tighter and more stringent regulations in the market have proved really effective in more established housing markets worldwide. They have given a thumbs up to the new committee and its regulations, stating that these measures will bring about more stability in the Dubai real estate market. Developers will naturally feel more comfortable if there are authorities verifying whether there is a market need for projects across diverse types. Demand will naturally arise for projects as well since they have been checked and approved by higher authorities in the Emirate.
Developers have also opined that the higher committee will make sure that there is readily available intelligence on the housing market in Dubai which is not always available for private sector players. Many real estate developers previously lacked access to illuminating information about neighborhoods, micro market factors, population and other aspects. With the new authority being established, real estate developers will garner more information that helps them plan projects more effectively.