The head of the Damac real estate company expresses his concern about the “expensive” Dubai

DUBAI, United Arab Emirates — Dubai’s property landscape shows no signs of cooling off, with 2024 on track to be another record year in terms of sales figures and property values, according to local real estate firms.

Rising demand for property, especially in the luxury sector, is driving up prices not just for homes but for everything else in the city, just as the UAE is expected to emerge as the world’s top wealth magnet for a third consecutive year.

For Hussain Sajwani, chairman of Dubai-based property giant Damac, this is both good and bad news.

“What worries me a little in Dubai is that [it’s] It is becoming an expensive city, and I have said in the past, that Dubai [is] It’s going to be [an] “It’s an expensive city. Because when there’s so much demand, and especially when talented people, average people, come, it creates more demand,” Sajwani told CNBC’s Dan Murphy from Riyadh on Tuesday.

“So today, getting a place in a school is difficult… and of course, business is going to raise prices and inflation. [is] “The price is going to be high, so Dubai is going to be an expensive city,” the president said. “And I hope that… [the] The government must find ways and means, and it is not easy to find ways and means when there is a continuous influx of people into the city.”

The latest figures from Dubai’s property market reflect growing demand. In July 2024, property sales reached Dh49.6 billion ($13.5 billion), an increase of 31.63% compared to the same period in 2023, according to local brokerage Elite Merit Real Estate.

“More than 43,000 property transactions valued at approximately AED 122.9 billion were recorded in the first half of 2024 alone, up 30% from the previous year,” the firm’s report published on Sept. 10 wrote, adding that the growth was partly due to “rapid absorption of new inventory.” Around 80% of units launched since 2022 have already been sold, the report estimates.

“Dubai’s property market is doing very well and I think we’re going to continue to do well because the demand in Europe is incredible,” Sajwani said. “Everyone wants to go to Dubai, from the taxi driver to the waiter to the businessman… Dubai is now attracting a lot of people who are not only rich but also talented. And it’s growing at a different level than before Covid.”

Damac’s founder highlighted how the Covid-19 period boosted Dubai’s popularity as a place to live: while much of the world remained in lockdown, the emirate boosted tourism and attracted new residents with the help of visas for remote workers and entrepreneurship.

“Dubai is today a global city, without a doubt, and it attracts a lot of talent and a lot of companies. We are going to continue growing,” said Sajwani.

Dubai has experienced a volatile boom-bust cycle in the past, most notably during the crisis period of 2008-2009, when the emirates’ property market crashed and many investors had to default on their debts. Asked if he was worried about a similar cycle repeating itself, Sajwani expressed confidence that the system was different now.

Asked if Dubai is more stable now, Sajwani said: “100%.”

“One of the main reasons for this is that the regulations that the Dubai government introduced after [the] “The crisis of 2009 or 2008 has had very good regulations. Very, very strict with developers, with clients and with zoning,” he said. “So that regulation is helping; not everyone can come and enter the market and launch a project… There is a very strict escrow, so the client’s money is very protected, and that’s what makes the market very efficient.”

Correction: The title of this article has been updated to reflect Hussain Sajwani’s title as Damac chairman.