By Staff writer
Emaar chairman warns “mistakes do happen”
Emaar chairman Mohamed Alabbar has warned that “people are greedy”, as Dubai’s property market continues to surge.
In a media interview, Alabbar said: "I think we are fine but people like to trade, people are greedy and so mistakes do happen. But as long as we minimise our mistakes, and we learn from our past mistakes – we go a little safer.”
Residential house prices in Dubai are increasing at an unsustainable rate and may see correction over the next 12 months, a report by property consultancy Jones Lang LaSalle (JLL) said last Thursday.
House prices in the emirate have climbed more than 22 percent over the past year – higher than any major global market – as billions of dollars of government real estate projects triggered a buying binge and stock market bull run that has caused concern at the International Monetary Fund.
“The rate of increases seen over the past year is indeed unsustainable…while residential prices and rents will continue to increase over the next 12 months, the rate of increase will decline somewhat,” the JLL report said. The surge has largely been driven by speculative buying, JLL said, noting: “Such rates of increase cannot be supported by the fundamentals alone.”
Nevertheless, Alabbar said he was confident that tighter regulations meant a repeat of the property crash in 2009 was not on the cards. “Banks are tight on lending, the central bank is tight on lending, government regulations are being modified and monitored,” he told Gulf Business.
Is Emaar greedy?
What a load of nonsense. The Dubai real estate market is driven by cash sales (70%). Tightening lending will not dent the market. The doubling of transfer fees to 4% will also have ZERO impact.
Mr. Al Abbar speaks as if developers such as Emaar and Nakheel have no impact on the state of the market. I am flooded with emails from Emaar telling me the exact date and time a project will be opened for sale and reminding me to get there quickly to book my property. If this spin is not fuelling the market then what is?
The simple solution for avoiding a bubble is to regulate such that off plan properties cannot be sold for two years after handover from the developer. Reigning in the amount of developments would also help, but I guess neither of these will happen due to the avarice of these state backed developers.
You can't make the same mistake twice. The second time you make it, it's no longer a mistake, it's a choice.
a very good point at the end...
I like every single word Omar wrote
EMAAR encourages speculators and unhealthy competition. Otherwise, they should have taken booking for new projects through their website with priority for SHARE HOLDERS, EXISTING CUSTOMERS, ETC. and avoid overnight queues by proxies of agents. They enjoy the preference because their competitor is no good at all.
i agree with you a lot of boom city's have such policies ie. must hold the property for x amount of years after moving in to reign in on flippers. the dubai government needs to do more in the regulation front stop issuing so much building permits, have monthly or quarterly quotas on issuing permits. but the reason for all these property purchasing is because there is cheap credit in the global economy, with central bankers globally keeping borrowing rates low the market seems flooded with cheap money. but once such rates start to rise you'll see a domino effect taking place because alot of countries including the BRICS countries rely on such credit for the economy.
In a sense greed is human nature. Greed allowed us to climb the evolutionary ladder. As long as there is something out there for us to want we will do what we have to do to get it. Unfortunately, some of us (politicians/fortune 500 CEOs) don't know when to stop and would rip the food from a child's hand to save a buck. What allowed us to thrive will just as easily destroy us.
Rich coming from someone who's company charges unfairly for service fees and stopped people from initiating their registration papers last week as Emaar couldn't cope with the influx of people
what happened to the invisible hand?
Funny that Emaar talks about greed when the last day of transactions before the 100% rise in transfer fee Emaar asked 15,000 Aed (instead of 5,000) for an immediate release of a Noc.