Local and foreign developers scramble to meet soaring demand in Dubai’s property market.
Competition intensifies among Dubai developers as land becomes scarcer and prices skyrocket.
In prime areas like Downtown and Business Bay, development has peaked, leaving few residential plots available and driving prices higher. Dubai-based developers are compelled to acquire new land parcels at high costs to keep up with demand, according to Tatjana Lescova and Sapna Jagtiani of S&P Global.
To capitalize on the unprecedented demand, local developers are launching multiple projects and expanding their land holdings. Danube Properties alone launched over Dh10 billion worth of projects in 2023, while Binghatti Properties invested Dh1 billion in land acquisitions even before issuing a $300 million sukuk.
Muhammad Binghatti, CEO of Binghatti Properties, emphasized the importance of liquidity for swift project completion, especially considering the two to three-year gestation period for luxury projects.
Foreign developers are also entering Dubai’s property market, further driving demand for land in rapidly growing areas like Maritime City, Jumeirah Village Circle, and Meydan City.
The surge in demand has led to a more than 50% increase in land prices over the past few years, with some areas experiencing even higher rates of growth. While developers have seen improved financial health due to record pre-sales and cash collections, analysts warn of potential oversupply risks that could trigger a market slowdown in the next 12-18 months.