Dubai announced on Monday it would establish a Higher Real Estate Planning Committee to enable the emirate to manage its real estate supply and demand.
The committee will be headed by Dubai’s deputy ruler Sheikh Maktoum bin Mohammed Al Maktoum and senior property developers.
It will aim to develop a strategy for all major real estate projects over the next 10 years and seek to improve the balance between supply and demand in the real estate market. The committee will also aim to introduce measures to ensure that semi-government real estate companies do not compete with private investors directly, said Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE, and Ruler of Dubai, on his official Twitter account.
“The initiative was welcomed by industry professionals and investors as a sign that the government is taking all the appropriate measures to avoid an imbalance and control further decline of the market, particularly as the real estate sector is a key part of Dubai’s economy,” said Dana Salbak, an associate at real estate consultancy firm JLL MENA.
The emirate’s real estate market has recently experienced an extended period of oversupply and falling prices.
The average level of residential completions in Dubai stood at around 20,000 dwellings per annum over the past three years, with as many as 60,000 dwellings scheduled for completion in 2019, according to JLL MENA.
A similar dynamic is at play in the retail sector, with construction completion potentially exceeding 600,000 square meters, compared to an average of 233,000 square meters per annum over the past three years.
The introduction of real estate supply controls followings certain measures launched last year, including long-term visas for UAE residents. “Boosting demand on one end while controlling supply is the natural way of reaching an equilibrium in the market,” added Salbak.