Property prices in Dubai will take longer to rebound, as oversupply in the luxury market continues, according to Phidar Advisory managing director Jesse Downs.

While the minor oversupply of 5-10% in the Dubai property market is “manageable and actually healthy”, it poses a problem when the addition of new stock lies in the luxury sector. “The problem really comes when you segment it by income and quality, and the oversupply is really in the premium market, which is the highest and the most competitive segment for development right now,” Downs told Bloomberg.

She explained that developers continue to build luxury properties, because investors continue to buy them. However, she added: “(Investors) forget that the medium income in Dubai is estimated about AED 6,000 a month (£1,165), which is completely in contrast with the supply that’s being developed. And on the scale that it is being developed.”

Downs believes the likely outcome will be many projects being cancelled or postponed as happened during the last correction. “As is typical in Dubai, they just slow down construction schedules, so that’s probably what will happen again. And you’ll see a lot of projects taking up to 10 years to complete.”