Damac chief to “go naked on TV and resign” if Dubai’s gloomy property predictions realised

Real estate analyst warnings provoke strong response from property boss Ziad El Chaar

The head of Damac has threatened to “go on TV naked and resign” if the worst predictions about Dubai’s property market are realised this year.

Ziad El Chaar, the Dubai developer’s managing director, made the comment in an interview with the Sunday Times.

Damac is one of the emirate’s largest developers, and is building several large mixed use projects in the city, including the 42 million square foot Akoya by Damac, which is being built in Dubailand.

US presidential candidate Donald Trump is planning to operate a Trump International Golf Course at the site, although the partnership with Damac has come in for criticism following Trump’s controversial remarks about Muslims.

El Chaar’s comments come as the Dubai real estate market continues to soften, hurt by the strong dollar and weakening investor sentiment.

Average residential property prices fell by 10 percent last year, and will drop further this year, Deloitte warned earlier this month.

Consulting firm JLL predicted last week that local prices would fall by between 8 and 10 percent in 2016, with rents falling by a more gradual 3 percent.

However, some analysts are hinting at even more dramatic falls. Jesse Downs, the managing director of Phidar Advisory, told the newspaper that prices could fall by “up to 20 percent over the next one to two years” if all the residential projects announced by developers are built on time.

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Posted by: Zahid

I have been affected by Damac because of late handovers, high annual maintenance charges, hollow and false promises, etc. I agree that whatever Damac is saying the reality is 100% the opposite.

Posted by: Genius

Markets go up and come down. Everywhere. Dubai is no exception. But look at rents here and imagine if you are an investor the sort of ROI you will get. Only people who live here understand the rental market, which unlike at the time of the last crisis is much more stable due to regulation. Residents do not pay tax in UAE. Non-oil related GDP continues to grow. Investors like Dubai. Exiting the market is always easy, and the market will rebound relatively soon - and grow it will, even if its a slower ascent this time. Prices have come down 10 per cent last year. They may do so again this year. When they do, many end-users will come into the market. Is it risky? Perhaps. Riskier than property markets such as London or Toronto or even NYC, inflated by lending at next to zero interest rates? No way.

Posted by: Scott Bosco

Hey Genius - before you make comments on markets such as Toronto perhaps you should be accurate . Let me correct you.

The Toronto market has been growing steady in past 15 years due to strong demand and yes , low interest rates. However purchasers need to deposit at least 20% in most cases. There are programs that allow 5% deposits but these are based on very good credit reports. Toronto rents are very strong and vacancies are very low - less than 1% in most buildings. The market is one of the rare ones that did not suffer during the 2008 crisis due to the fact banks did not have exposure to bad debts.

I worked in Dubai real estate for over 10 years and I can tell you the "end user " market is just about at the heights now.

Keep pumping the market there as most in the industry do. The smart money won't buy it this time.

Lastly , Toronto, London, and New York are major markets in world class countries - Dubai is really not in same league ....

Posted by: simon

"Genius"...on top of what Louise commented on, I think you need to revisit your comment again but before doing so...read a bit about Dubai's current economy and the huge 'personal debt' issues that expats and locals are experiencing. Read a 3-4 month-old HSBC customer debt survey. Its an eye opener.

Look further than Oil & Gas and you will see that SME businesses are suffering badly. Retail is suffering and so too is tourism. All these industries are interconnected and huge employers.

You only have to look at the banking sector in Dubai to see the writing is on the wall. Banks have sacked/laid off circa 2,000 staff in the last 3 months alone. When banks sack staff and cut back, it's for a reason...an economy-based reason.

You only have to take notice of recent surveys in all sectors to understand things are not as you have laid out.

What has all the above got to do with the real estate sector? Everything and more.

Posted by: Louise

I don't think you understand what the analysts are saying. The real estate market is bound to fall tremendously, due to a heavily saturated market, when all the new projects are completed. By saturated, I mean the supply is extremely greater than the demand. Dubai already has a higher than average vacancy rate, around 45% for commercial property and 25% for residential. The laws of economics state that when supply is greater than demand, the prices must drop. This has happened in NYC, London, and everywhere that experienced a real estate market crash. They will most definitely experience another bubble if they don't put an immediate stop to the amount of real estate speculation and property flipping, that's giving a false impression of high demand.

Posted by: leo50

please advise which TV network he is referring to so I can cancel my subscription!!

Posted by: Andrew John

Why do these guys open their BIG MOUTH without thinking? This gives a chance to every Tom, Dick and Harry to chase him and the media with all realistic data. When the tables turn against him, I hope he does what he said on international channels like BBC or CNN and get rewarded for his words. He is really not fit for a Chief position at Damac.

Posted by: bobby

not a befitting statement from the MD of a 'leading' property developer...

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