The chief executive of Dubai’s second largest property developer Deyaar said on Wednesday that there was evidence house prices in the emirate had fallen by 50 percent in some areas.
Deyaar's Markus Giebel told Arabian Business: "You got a signature villa for AED25m in the hype, now you can pick it up for AED12m," adding that in other places in Dubai values have only dropped by 10 percent.
“An average doesn’t tell you much, it really depends on what area,” Giebel said.
Residential property values in Dubai have come off by at least 25 percent since peaking late last year, investment bank Morgan Stanley said last month.
The CEO of Deyaar ruled out going to the debt markets this year to fund projects. “The debt markets are dead,” he said.
Giebel predicted that the property market in Dubai would bottom out in 2009 and show signs of recovery next year.
He said he was unconcerned about his company’s share price, which was 2.1 percent down at AED0.46 at 1.59pm on Wednesday.
“The only reason why I would be worried is if there could be a hostile takeover. My largest shareholder is the Dubai Islamic Bank which has 42 percent. There is no takeover possibility, I am not worried,” he said.
Meanwhile, Deyaar would consider a merger deal with another firm, Giebel said, insisting the developer is not currently in talks with a rival.
“If it makes sense for the shareholder and for Dubai there maybe a possibility that something happens, we don’t know when it is, who it is,” he told Arabian Business.
Deyaar and Dubai's Union Properties denied in October that they were in merger talks but were unable to say if the government was looking into ordering a tie-up.
"The next four quarters will all be profit," Giebel said, adding the firm had "enough cash" to meet its commitments, although the company was open to talking to the government about funding if cash became available.
Last month, Dubai's government sold $10 billion worth of bonds to the United Arab Emirates central bank to create a fund for struggling state-linked firms. Deyaar is owned mainly by Dubai Islamic Bank and the public.
"If the government opens up funds to companies like Deyaar then we would like to talk," Giebel said.
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