Dubai property grossly underpriced, says developer

Enshaa chief Raza Jafar says city still cheap in international terms

L-R: GGICO Properties CEO Andrew Chamber, JLL MEna head of research Craig Plumb and Enshaa CEO Raza Jafar
L-R: GGICO Properties CEO Andrew Chamber, JLL MEna head of research Craig Plumb and Enshaa CEO Raza Jafar

The CEO of Dubai-based property developer Enshaa has argued that the Dubai property market is still 'grossly underpriced'.

Speaking at a recent debate held at Dubai's Capital Club, Raza Jafar said: “There is a great deal of potential in the Dubai market, especially when you consider its position in comparison to other major international cities."

He argued that Dubai's importance as a global financial hub was already well established, and that the strength of its infrastructure and the scale of projects being delivered meant that it compares favourably with other hubs like New York, Shanghai, London and Singapore.

"At this point in time Dubai’s property sector is still grossly underpriced in comparison to its international counterparts, which means it has the capacity to still grow significantly in the long term. Dubai also provides excellent earning opportunities to its residents thanks to its taxation benefits, with the accompanying generation disposable income and hence people have opportunity to build up real estate assets over here.”

Enshaa is the developer behind Dubai's D1 tower and the Palazzo Versace Dubai developments. It also owns construction firm Kele Contracting.

A recent Q3 report by Jones Lang LaSalle said that apartment prices had climbed by 34% over the past year, while villa prices increased by 20%.

Speaking at the same panel debate, JLL's head of research Craig Plumb said that residential property price increases were showing signs of levelling off.

“Average prices in this sector have increased by 64% over the last two years," he said. "The good news now is that, while the market is still rising, it is very close to the top. Although prices are still going up at this point in time, the growth rate itself has slowed down."

Andrew Chambers, CEO of GGICO Properties, also argued that developers are approaching the market with more "common sense"

"Generally, we now find that the majority of newer and relatively smaller developers have shifted their focus from selling wholesale – looking for people who will buy property in bulk and flip it – to developing projects that suit the market. It certainly seems to be a lot more stable."

 

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