Dubai property firm CEO raises concerns over high costs.

• The surge in demand for luxury properties in the United Arab Emirates is driving up prices of not only homes but also other items in the city, making it the world's top wealth magnet for the third year in a row.
• For Hussain Sajwani, the chairman of Dubai property giant Damac, it's both good and bad news.

Dubai's property market is expected to continue its upward trend in 2024, with sales figures and property values projected to reach new records, according to local real estate companies.

The surge in demand for luxury properties is driving up prices not only for homes but also for all other items in the city, as the UAE is predicted to become the world's top wealth magnet for the third year in a row.

For Hussain Sajwani, the chairman of Dubai property giant Damac, this development signifies both positive and negative implications.

Sajwani expressed concern about Dubai becoming an expensive city, stating that he had previously predicted this outcome. He explained that as demand increases, especially when talented and average people arrive, it leads to higher costs.

"The chairman stated that obtaining a seat in school is challenging, and as a result, the business will increase prices, and inflation will be high, making Dubai an expensive city. He added that he hoped the government would find ways and means to address the issue, but it is difficult to do so with the constant influx of people into the city."

The Dubai property market is experiencing a surge in demand, with property sales reaching 49.6 billion dirhams ($13.5 billion) in July 2024, up 31.63% from the same period in 2023, according to Elite Merit Real Estate.

The report released on Sept. 10 by the firm stated that the first half of 2024 witnessed over 43,000 property transactions worth approximately AED122.9 billion, representing a 30% increase from the previous year. The growth is attributed to the "rapid absorption of new inventory." The report also estimates that around 80% of the units launched since 2022 have already been sold.

"The Dubai property market is thriving, and I believe it will continue to do so due to the high demand in Europe, said Sajwani. "Dubai is attracting not only wealthy individuals but also talented people, and it's growing at an unprecedented rate since pre-Covid," he added."

Dubai's popularity as a place to live increased during the Covid-19 pandemic due to the emirate's encouragement of tourism and attraction of new residents through visas for remote workers and entrepreneurs, as noted by the Damac founder.

Sajwani stated that Dubai is a global city, attracting a lot of talent and businesses, and will continue to grow.

Dubai has a history of boom-and-bust cycles, most notably during the 2008-2009 crisis when the property market crashed and many investors defaulted on their debts. However, when asked about the possibility of a repeat, Sajwani expressed confidence that the system is different now.

Sajwani confirmed that Dubai is now 100% stable.

"The strict regulations implemented by the Dubai government after the 2009 or 2008 crash have been beneficial. These regulations are very strict on developers, customers, and zoning, which helps to prevent unscrupulous individuals from entering the market and launching projects. The strict escrow system ensures that customer money is well protected, making the market more efficient."