Global crisis 'will be good for UAE property sector'

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GOOD THING: The credit crisis will ultimately be good for the UAE's real estate market, says Eye of Dubai's CEO. (Getty Images)

The global financial crisis will ultimately be good news for the UAE's real estate market, a prominent Dubai businessman said on Thursday.

Abdullah Al Harbi, CEO of Eye of Dubai, a company that promotes the emirate to investors across a range of industries, said the six-year boom had created a "number of small and, in some cases, unscrupulous real estate developers springing up everywhere".

He claimed people who were hairdressers or valets one week had set up as real estate developers the next without the necessary capital to support their ventures.

"The fact that many of the people starting up these companies were either inexperienced in the market...or just plain unscrupulous and looking to make a quick buck, meant that not all projects that had been launched had necessarily been properly planned, which is just a recipe for disaster, and sooner or later something was going to give," he said.

"I believe that although the global financial crisis may have set off the correction that is now taking place in the market,it was unavoidable and it would have happened eventually.

"Looking at it like that, it is better that it is happening sooner, so that Dubai, in particular, can now develop a more realistic and mature property market that will stand firm and continue to grow for many years."

Al Harbi's comments came following the International Property Show 2009 (IPS 2009), which took place in Dubai earlier this week.

"Property shows such as IPS 2009 are really important to show investors and others that the real estate market in Dubai, and the region in general, is still strong, and that there are many projects that are still going ahead that are good investment prospects," he added.

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READERS' COMMENTS

hairdresser
Posted by vinay, Dubai, UAE on Sunday 22 February 2009 at 13:02 UAE time


These so called hairdressers had taken property market so high only then lot of investors made a kill, in this correction period what we need are the end users which seems to be drying up (job losses global meltdown etc.)

What we need here the authorities to bring down the cost of living not only rentals but also must keep the watch & bring down on the bear necessities (food stuff, petrol,school fees, electricty etc) if the cost of living is low this will encourage the end
users to live in Emirates & not to forget above all the residence visa for the homeowners for a longer period.

True!
Posted by SR on Friday 20 February 2009 at 11:28 UAE time


True, Dubai will benefit at a macro level as they would end up with only the good quality developers. The quality on offer will also improve as price in future price would have be based on quality.
I feel something should be done about the bona-fide investors who got cought in the hype!!

Size doesn't matter
Posted by geriant, Dubai, UAE on Friday 20 February 2009 at 04:39 UAE time

What is really good for the UAE property sector is that developers big and small have been forced to be honest for once. Never again will investors believe their extravagant claims, and the word candour has finally found a home in the Gulf.
There is nothing wrong with a hairdresser turning to property to make a buck, as the difference between a bad haircut and a good one is a week.

that is very true
Posted by Hal-Luke, London, United Kingdom on Thursday 19 February 2009 at 18:51 UAE time


Indeed, I do agree with the assessment. However, Middle East has a common denominator in terms of business activity. You will find in many cases that businessmen in the region tend to spread their interests wide, rather than specialise in a particular field. This is part of the region's love affair with trading, that is trading in anything and everything! Hence, you will find businesses part of other businesses that can not generate synergies. As the article mentions, hairdressers turning property speculators is part and parcel of this unique pattern. In my view, what would make Middle East GREAT is to specialise and not to have the urge in investing in disconnected businesses. Without synergy energy is wasted, without energy no progress can take place, without progress no busines can grow to be a world beater!

If somebody can come up with a secret formulae to incalcate importance of specialisation into businessmen of the region than GREAT will come back to Middle East business sooner than later.
With plenty of cash available, specilised Middle East businesses will be world beaters for sure.
Hal-Luke Savas MBA FCIM MBIFM ICIOB aff.CIBSE
londonmanagement@aol.com

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