Buyers currently outnumber sellers in common areas of the emirate, resulting in a shortage of inventory in Dubai's property market. According to a survey by global real estate consultancy Colliers, the sector has shifted into a seller's market as a result of the consistently high numbers of buyers.

“The majority of respondents in our research agreed that the number of buyers registered currently outnumbers the supply in common areas of Dubai, as agents have told Colliers that inventory is currently limited. One of the reasons for this, is the "need to sell," with owners who wanted to liquidate their properties and the remaining owners "neutral to sell, but depending on the right price."

New project launches have slowed significantly since the creation of the Dubai Supreme Committee for Real Estate Planning in September 2019. Although new units from recently launched developments are still being delivered, low property prices and interest rates are attracting a significant number of buyers.

In 2020, Asteco estimates that 34,000 apartments and villas will be handed over.

What we're seeing more and more people are willing to pay more because there's a shortage of stock, and assets that are unused on transfer rather than rent control the highest premiums. Bidding wars, agent fees, and ever-increasing owner demands have happened because of this. Ninety percent of participants agreed that current pricing and price rises have greatly exceeded expectations. Some feel that this sharp rise in demand is putting them in an uncomfortable position.

A stalemate can result from unrealistic owner expectations combined with continued strong demand from buyers. As a result, many buyers are considering joining the market and overpaying. A whopping 80% of participants also agreed that many properties are currently being sold off-market, with the risk of over-advertising a property due to increased competition among agents vying for inventory.

According to Colliers' survey, 57% of respondents saw an increase in investor activity, and another 70% saw an increase in foreign investment into the sector, with Chinese, European, and Indian investors being the three most common nationalities.

Many claim that the UAE's handling of the global pandemic is a major cause of increased consumer activity; this has provided consumers a good sense of security and continues to be a key influencer in the decision-making phase of choosing to buy. The majority of buyers are already financed in some way, with some higher-end buyers taking a small amount of financing as well. The rent/mortgage payment difference is still favorable to ownership, a growing number of renters are looking to invest in property for themselves.

As previously reported by Atif Rahman, director, and partner of Danube Properties, there would never be a perfect balance between demand and supply.

“There may be a momentary equilibrium, but in general, either supply or demand would be higher. This causes real estate value inflation or deflation. I'd like to stress that while there is a chance of oversupply in any market around the world, there will never be an oversupply of good properties,” Rahman said.

We are currently witnessing a reasonable increase in demand, which will be sufficient to absorb the existing supply of real estate in the Dubai real estate market.