Emirates: One of Dubai’s largest real estate developers said that 2021 would be another year full of challenges for the emirate’s real estate market. He also warned against companies oversupplying the market, which is already suffering from a supply glut, with new products.

In an interview with Bloomberg TV, Hussain Sajwani, chairman of Damac Properties, hoped that “real estate developers will not flood the market with new housing units just because a modest improvement was recorded.”

“This is where the threat lies. I hope that major real estate developers will not introduce additional supply to the market just to sell a few hundred residential villas or apartments,” he added.

Dubai’s real estate glut triggered a decrease in housing unit prices by more than 30 percent since 2014, which pushed the government to form the Higher Committee of Real Estate to manage the sector’s supply and demand.

It seems that many real estate developers have recently started to accept the idea of halting the launch of new projects. After resisting calls to stop building for a long time, Mohammed Alabbar, the chairman of Dubai’s largest real estate developer Emaar Properties, announced, at the beginning of December, that his company has temporarily stopped the construction of new projects.

Damac’s chairman pointed out that the coronavirus pandemic has forced everyone to stop building “whether they like it or not”. This comes in addition to them realizing that the market is suffering from an oversupply.

Sajwani stressed that his company is “very cautious” and will not be introducing new products. “We also do not intend to expand our operations because moving forward, the picture does not seem rosy at all.”

Damac Properties’ stock prices had increased by 14.3 percent on Sunday at the Dubai Financial Market (DFM), after disclosing to DFM’s management that it will be looking into a potential acquisition deal next Wednesday, without providing any additional details in this regard. The company then clarified, before the end of the trading session, that the intended acquisition includes increasing its current share in London’s “Nine Elms” project.