Author: Nick Grassick, Managing Director, PH Real Estate
The recent announcement from the Rulers Office regarding the establishment of a committee to oversee real estate development should be welcomed with open arms.
Firstly, it will acknowledge recurrent fears regarding oversupply; an independent, objective view should ensure that the development and release of homes will be in line with current and forecast requirement. The ability to effectively manage the staggered handover of master planned communities will go a long way to control the delicate balance of supply and demand metrics, and by extension, influence the stability of property values.
Secondly, it demonstrates how much the Dubai property market has matured. An independent oversight and steering committee is something found in most other global cities with property markets far older than the fledgling we find in Dubai. The fact that an independent ombudsman, with an objective stance, will now be able to suggest and revise infrastructure and community requirements, as a result of shifting sentiment and demand, should provide great reassurance to both institutional and private investment whilst also catering to the homeowner market.
As Dubai continues to develop and grow, so will the sprawl move further inland: Away from the coast and the Sheikh Zayed Road corridor which once held significant influence over what was deemed to be a more desirable location, and as a result, influenced home values. Now, and what can be expected to be more increasingly, we are witnessing the creation of multi-zoned master planned communities encompassing residential, commercial, health, retail, education, industrial and recreational. As should be expected of a progressive, expanding city; these multi-zoned communities will require precision planning to ensure they cater not only for the needs of the families which will populate them, but also deliver the greatest value to the companies which develop them. This commercial factor must be considered to attract international investment, both in form of overseas developers wishing to expand into UAE, and of course buyers.
The decision to deter direct competition between semi-government and private development is incredibly astute. This may be the key note many international developers hear when considering Dubai as an opportunity to expand their enterprises. With international development comes new design, new eco-friendly and sustainable solutions, new affordable housing solutions. Ultimately this diversification will be to the benefit of the population of the country. With homes currently at record affordability levels, and significant interest from a buyer base who are able to afford more than historically possible, the announcement could not be more timely. With the correct stewardship the oversight committee can steer what has previously been an incredibly dynamic property market into much more measured, controlled seas.