Emaar chairman plays down Dubai bubble fears

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Emaar chairman Mohamed Alabbar.

Emaar chairman Mohamed Alabbar.

Dubai’s government will not allow "unjustifiable" rent increases to fuel a new price bubble on the back of the emirate's Expo 2020 win, Emaar chairman Mohamed Alabbar has said.

In an interview with Al Arabiya.net, Alabbar said officials were “closely monitoring” property prices and rents.

Concerns have been voiced that the Expo victory could cause property developers to build too many residential and commercial projects, and investors to pour too much money into them, inflating a speculative bubble that would eventually burst.

Such a bubble popped in 2008-2010, when the global financial crisis caused Dubai property prices to crash by more than 50 percent, shaking financial markets around the world.

But Alabbar played down fears of a new property bubble in the interview.

“The government will not allow unjustifiable increases in rents or property prices,” he told Al Arabiya News Channel.

“There is government control, and there is economic growth across all sectors... The government has been monitoring since before the economic boom, during the boom, and it continues to monitor... and don’t forget there are six years to go until the Expo 2020, so I don’t think we will have masses coming into the city tomorrow morning.”

He added: “Better and more serious work must be done now, because the trust is big, the hope is big, and today we represent the Arab world overall... the burden is heavy but thankfully we are capable.

“This [win] means business, investments, tourism and growth... the UAE maintains this [success], but it also poses responsibility... as the world trusted [us],” he said.

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Posted by: Dina

Couple of weeks ago I attended the Emaar sale. How surprised I was to find out that one had to buy 2 properties at once. As an ordinary citizen of Dubai who plans on staying here for a while I just would like to buy a place to live. Simple. Neither I do have enough funds to buy two properties, nor do I wish to do so.

Most of the buyers were company reps ready to buy whatever was available (walking with required Company docs and stamps) and foreigners who arrived to join their agent queuing for them.

6 hours of queuing, finally meeting the Emaar sales assistant who then tells me I must buy 2 properties or nothing. When I ask him how could I buy only 1 property, he opens me a list of top end 1bedroom only apartments in Downtown where 1 bedroom flat goes for min AED 3.9million. Is that a joke? Is that how Emaar handles it all?

Posted by: N koul

Well it is a good initiative by the government. However it generally doesn't happen. I live in international city and this September i had a rent increase of 12.2%. The landlord sold the building in October and the new landlord has already handed over a notice that all the new agreements will have a new rent and the increase is 15.5%. Is this Justified? Lot of people have already vacated the building because of this increase and may be soon i also have to vacate and find a economical place in other emirates. I would request the concerned authorities to seriously look into this matter. As it is Dubai is one of the most expensive cities in the world.

Posted by: Dave

"I don?t think we will have masses coming into the city tomorrow morning..."

So why was I told last week by a salesperson at Damac that they had been told to put up the prices for property the day after national day?

And if Damac do it, then others will almost certainly follow.

Nobody seems to be able to tell me why a trade show being held seven years from now justifies big hikes in rent and property prices.

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