Emaar chairman Mohamed Alabbar has warned that “people are greedy”, as Dubai’s property market continues to surge.
In a media interview, Alabbar said: "I think we are fine but people like to trade, people are greedy and so mistakes do happen. But as long as we minimise our mistakes, and we learn from our past mistakes – we go a little safer.”
Residential house prices in Dubai are increasing at an unsustainable rate and may see correction over the next 12 months, a report by property consultancy Jones Lang LaSalle (JLL) said last Thursday.
House prices in the emirate have climbed more than 22 percent over the past year – higher than any major global market – as billions of dollars of government real estate projects triggered a buying binge and stock market bull run that has caused concern at the International Monetary Fund.
“The rate of increases seen over the past year is indeed unsustainable…while residential prices and rents will continue to increase over the next 12 months, the rate of increase will decline somewhat,” the JLL report said. The surge has largely been driven by speculative buying, JLL said, noting: “Such rates of increase cannot be supported by the fundamentals alone.”
Nevertheless, Alabbar said he was confident that tighter regulations meant a repeat of the property crash in 2009 was not on the cards. “Banks are tight on lending, the central bank is tight on lending, government regulations are being modified and monitored,” he told Gulf Business.