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Omniyat confident Dubai property market stable
Real estate prices in Dubai will continue to soar until at least 2009 when a boost in housing supply with balance the market out, the chief executive of Omniyat Holdings said on Wednesday.
Mehdi Amjad rubbished speculation the market had become a bubble waiting to burst, citing strong buyer sentiment and the large number of people moving to the emirate.
“I don’t think property prices will drop or that the market will suffer a correction. There’s no reason for the market to adjust, we have a lot of people moving to the region, strong buyer sentiment and plenty of liquidity,” Amjad told ArabianBusiness.com in an interview.
Amjad said continued strong demand meant Omniyat Properties expected to quadruple the value of its property portfolio in Dubai to 21 billion dirhams ($6 billion) this year, after it doubled sales in 2007 year-on-year.
He said the company reached sales of just over 3 billion dirhams in 2007 compared to 1.5 billion dirhams in 2006.
The firm will deliver both its 507 million-dirham One Business Bay and 245 million-dirham Bayswater tower projects in 2008, and will launch projects in Abu Dhabi, Bahrain and Saudi Arabia, he added.
Amjad said the increase in housing supply would also stabilise inflation, which hit a 19-year high of 9.3% in 2006, the last official figure.
Property prices in the emirate shot up around 20% in 2007, and could rise a further 5-10% this year due to the supply shortfall, Egyptian investment bank EFG-Hermes has predicted.
Amjad said certain exclusive developments had seen prices increase more than 100% in the last two years. He said the rise was unhealthy for market sustainability.
Many analysts have highlighted the shortage of housing supply as the main driver of inflation in the UAE.
Amjad also said the Gulf real estate market would not be hit by the recent slowdown in the US economy.
“The US slowdown has been a blessing. We are seeing more US funds and institutional investors looking at the Middle East for investment opportunities due to the weakness in their own market,” he said.
UAE Economy Minister Sheikha Lubna Al Qasimi said on Monday soaring growth in the Gulf real estate sector may not be sustainable in the wake of a global market slowdown, warning global issues had to be monitored closely to address risks posed by a lack of liquidity.
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Comments 1-2 of 2
Posted by stephen on 15 February 2008 at 10:04 UAE time
I often wondered whether there were any other like minded souls out there, so thanks Brandaid for rising above the apathy and saying what many others must feel.
Is it not to be expected that a major developer would signal an emphatic "no" to suggestions of a property bubble? You are hardly likely to hear Mr Amjad, Mr Sajwani at Damac or Mr Alabaar at Emaar suggest otherwise.
Mortals who don't breathe the same rarified air as these superbeings obviously lack the insight and crystal clear vision that allows such wonderful statements as " real estate prices will continue to soar until at least 2009" What next, horse racing tips?
It's good to have an open forum about these issues but the Omniyat pitch is as boring as it is relentless and biased. Whilst full of admiration for his obvious business abilities, is it at all possible that the very young Mr Amjad has ever seen anything but a bull market? I think we would all enjoy input from somebody in the market who has achieved that rare event and actually delivered something to the end user.
Posted by brandaid, Dubai on 14 February 2008 at 20:46 UAE time
These articles are amusing. Why do you ask a Property Salesman if he thinks the market will continue to grow or slow down? Mehdi is a smart guy and the last thing he is going to say as the CEO of a Property Development Company which he owns, is something that will hurt his sales and impact on his profits. As a Strategic Marketing Consultant for the Property Industry I can tell you that the luxury end of the market is overserviced and the mid to low end is underserviced. Luxury home prices in Dubai have reached a price point that is not sustanable, but who is going to say that in the land of Bigger, Better, More, First, Greatest etc. ect. Please, when you ask the CEO of Property Development Company what he thinks of the market, it's his job to tell you all is well, so knowing that, why ask his "opinion" in the first place? It's not news, just PR for Omniyat, which is why you, needing advertising from this developer, will probably not post this comment anyway.