Arabian Business reported that the oversupply of residential properties in Dubai could take up to 5 years to clear.

Mr Chris O’Donnell CEO of the debt laden real estate firm said that "The general oversupply will be cleared in three to five years and will be driven by the economic growth. Things can happen to cause oversupply to be removed fairly quickly. Our view is based on what we are seeing in the market.”

His comments echo those of Arabtec Holding CEO Mr Riad Kamal, who in June forecast a similar timescale in a speech to delegates at the Arabian Business Conference 2010. Mr Kamal said that A lot of the new property completed, around 40,000 units this year will take time to be absorbed. I feel that Dubai will need a minimum of four to five years before it can absorb that supply.

In January, research by UBS estimated that by the end of 2011 the oversupply in the residential sector could be as high as 150,000 units

Earlier this week, Mr O’Donnell confirmed that Nakheel, the developer of high profile projects such the Palm Jumeirah and The World is focusing on restarting 8 short term residential projects by the end of October. Construction work will resume at Al Furjan, Jumeirah Village, Jumeirah Park, Jumeirah Heights Clusters, Veneto, Badhrah, Jumeirah Islands Mansions and International City.

He said that “There is a substantial amount of work to be completed there in the order of AED 7 billion to AED 8 billion. That is going to be very positive for the market. These projects aren’t going to be ghost towns but are going to be completed.”

(Sourced from Arabian Business)