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Nakheel to tackle rocketing house prices

Property developer Nakheel Group will create as many as 200,000 new residential units in Dubai over the next decade, and expects strong demand for property in the booming city to persist, a top company official said.

"The market could provide 200,000 to 400,000 residential units over the next 10 years and Nakheel could provide half of those," the firm's executive director for investment projects, Robert Lee, told Reuters late on Tuesday.
The company is building three palm-shaped islands and an archipelago designed like the map of the world to host hotels, shopping malls and homes.

"Demand has grown far faster than supply, which has led to the acceleration of house prices; rent has gone up as well as construction costs," Lee said. "So to calm this acceleration, we have to provide more units for people to live in."

Rents have risen sharply in Dubai in recent years, fuelling inflation. Although a large amount of new property will come onto the market in coming years, Lee said the market was far from being saturated.

"Consultants raised concerns about saturation a couple of years ago, but they were wrong as it hasn't happened because there is huge growth in Dubai," he said.

Dubai's population grew almost 26% to 1.42 million at the end of last year, from 1.13 million a year earlier,
equivalent to 24,333 people every month, according to Dubai's Statistics Department. Tourists are not counted in the figure.

Manal Shaheen, Nakheel's sales and marketing director, said the firm will develop homes for two million people by 2020.

The UAE, the second-largest Arab economy, is leading a Gulf Arab boom in investment in construction,
mostly in real estate development.

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