Dubai's luxury residential property market still holds opportunities for spectacular growth despite expectations that supply will outstrip demand in the next year, property developer Nakheel said yesterday.
Buyers camped overnight outside government-owned Nakheel's sales office in Dubai to snap up luxury villas offthe-plan in Jumeirah Park development, said Yousuf Kazim, a senior general manager at Nakheel.
Jumeirah Park consists of more than 2,000 villas and Nakheel was hoping to sell about 10 to 15 per cent of that in the first phase of a sales campaign that began on Wednesday.
"We sold more than 900," Kazim said."The response was unexpected. We wanted to complete selling the first phase. Instead we sold out the second and third phases, which were not going to be launched until December," he said.
It was rare bit of good news for developers of residential property in Dubai, who are bracing for new units to flood a market that has been booming since the emirate opened its property sector to foreign investment in 2002.
Abu Dhabi-based investment research house Prime Emirates said in August that 105,000 residential units would be completed in Dubai by 2007, creating a surplus of up to 33,000 units by 2008.
Such gloomy forecasts have prompted some developers to switch resources to the commercial property sector where prices are expected to keep rising by 50 per cent a year until 2008.
"The outlook depends on which segment you are in," said Kazim.
He said apartments accounted for much of the supply expected to hit the market in the next year. Villas remained in relatively short supply.
"We studied this market and spotted this gap," he said.
But even Kazim pointed to signs that Dubai's property market was maturing.
While developers have long been able sell properties offthe-plan in Dubai, in the early days of the boom most buyers were investors who wanted to make a quick profit from rapidly rising prices, rather than potential residents.
© Emirates Today 2006
