By Staff writer
Real estate analyst warnings provoke strong response from property boss Ziad El Chaar
The head of Damac has threatened to “go on TV naked and resign” if the worst predictions about Dubai’s property market are realised this year.
Ziad El Chaar, the Dubai developer’s managing director, made the comment in an interview with the Sunday Times.
Damac is one of the emirate’s largest developers, and is building several large mixed use projects in the city, including the 42 million square foot Akoya by Damac, which is being built in Dubailand.
US presidential candidate Donald Trump is planning to operate a Trump International Golf Course at the site, although the partnership with Damac has come in for criticism following Trump’s controversial remarks about Muslims.
El Chaar’s comments come as the Dubai real estate market continues to soften, hurt by the strong dollar and weakening investor sentiment.
Average residential property prices fell by 10 percent last year, and will drop further this year, Deloitte warned earlier this month.
Consulting firm JLL predicted last week that local prices would fall by between 8 and 10 percent in 2016, with rents falling by a more gradual 3 percent.
However, some analysts are hinting at even more dramatic falls. Jesse Downs, the managing director of Phidar Advisory, told the newspaper that prices could fall by “up to 20 percent over the next one to two years” if all the residential projects announced by developers are built on time.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Damac has little credibility with local consumers in Dubai who are in the know as it is. So such attention seeking, sweeping statements are just what one would expect from such a non-entity of an organization as Damac. No one in their right minds would take much they have to say seriously in fact. They are to property development what Donald Trump is to politics.... the Joker in the pack.
Its just yet another false truth...
I have lived through enough bubbles to know that when a property chief says something, you are supposed to take exactly the opposite meaning.
His comments are very typical of someone from this area who wants to keep his high profile (and high paying) job. He knows he wont be permitted to go naked on any TV Channel even if he is proven wrong in his predictions. Secondly, as the DAMAC Chief he must make tall claims to keep the confidence of the shareholders. Which CEO of a Co or Leader of a Nation or General of an Army would predict he is going to lose? Making ridiculous claims and extravagant promises show immaturity.
Ziad El Chaar is a legend
very classy from a listed company ceo.
Ok, so what are the predictions? That the prices will fall by 20% over the course of the next 1 to 2 years? That is such a generic statement. We know that cost of construction is at an all time low, as cost of transportation, and cost of building materials is also down. So if it costs less to produce a new home, some of that value will be passed over to the buyer. As far as ready properties go, I dont believe that owners will sell for 20% below market prices today. The only thing that could happen is: If demand decreases, and people lose jobs (which is not a major prediction) rental prices may come down in prime areas. All developers will not hand over everything on time, Damac will for sure not hand over on schedule. So not much to worry about here.
I spent many years working in the Dubai real estate market and the slippery slide has been coming since 2011 when a false rebound from the financial crisis gave investors a 2nd chance to loose money. I recently asked 5 of my previous colleagues in the RE business there for some views on the current market:
The only reliable pipeline of Dubai investors left are those that probably need to get funds out of insecure neighboring countries or have other "reasons" to invest in a overpriced real estate of poor quality. The Western / UK expat / Russian business is dead. The fire at The Address opens questions regarding quality of construction in 2nd and 3rd tier developers. Dubai authorities / press try to hide bad news or reports regarding Real Estate however a fire on New years Eve is a bit hard to cover up.....
Brokerages are closing and agents are leaving the industry.
Don't worry about seeing a naked property executive on television..... termination or resignation - maybe.
I suggest he starts working out!