Dubai authorities have warned against what it described as misleading information about its property market, saying recent reports about the completion of tens of thousands of new houses are incorrect.
Sultan Butt bin Majran, Director-General of Dubai’s department of land and property, said around 10,000 new houses would be completed this year but added they would not put any pressure on the local property market.
“News that between 40,000 and 50,000 housing units would be ready in 2011 are not correct…we expect about 10,000 houses to enter the market this year but they will not put any pressure because the market is able to absorb them given the ongoing recovery in the property sector,” he told the semi official Alittihad newspaper in an interview published on Saturday.
“All those reports which talk about the entry of tens of thousands of new housing units into the market this year are inaccurate….they give misleading indicators to the investors about the real situation and the future of Dubai’s property market.”
He said such reports are based on the assumption that the nearly 220 housing projects under construction in the emirate would be completed this year.
“This is a wrong assumption because these projects require two to three years to be completed,” he said.
He expected the “relative imbalance” between supply and demand in Dubai’s property sector would be automatically corrected, adding that return on investment in this sector remains strong despite its fluctuations.
“Property prices in Dubai have reached their 2005-2006 levels, which I believe are attractive and feasible for local and foreign investment…this will benefit the domestic economy as construction costs have sharply declined,” he said.
“I believe the market and prices are now heading for stability despite some price disparities in the emirate, depending on the location and the type of project.”