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Sun 9 Nov 2008 10:43 PM

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Dubai off-plan property prices down 15%, says broker

Better Homes says last three months a 'reality check', denies reports of big redundancies.

The boss of one of Dubai’s biggest property brokers said on Sunday the price of off-plan properties has plummeted 15 per cent in the last three months, further evidence the brakes are on the housing market.Ryan Mahoney, managing director of real estate broker Better Homes, said the cost of off-plan units - those properties which are not completed - are "falling rapidly" as demand dries up among buyers, struggling to secure loans.

"Off plan properties are falling quite rapidly, and I expect them to fall further. Over the last three months I've noticed they've come down anywhere between 5 and 15 percent,” Mahoney told Arabian Business.

"In the last three months there has been a reality check. Investors have been unable to get the financing they have needed," he added.

The number of properties on Better Homes' books has also risen 10 to 15 per cent in the last three months to 6,000, suggesting that sellers are flooding the market, worried about further price falls.

While off plan transactions have fallen 8 per cent in the last quarter Mahoney said, sales of completed homes have actually in increased.

Better Homes employs 700 staff and has about 180 sales agents who don't earn a salary but are paid on commission.

The company has a high turnover of staff as agents who don't sell enough homes often leave.

Mahoney said the firm's attrition rate - the number of people who leave as percentage of the total workforce - was less than 3 percent in the last quarter.

Arabian Business spoke to one current employee at Better Homes and one former employee, who was made redundant last week.

Both said 35 percent of the marketing department have been laid off in the last two weeks, reducing the size of the team from 20 to around 13. One of the sources reported there have been a further six redundancies in procurement

The former employee said: "Every department has been asked to make cuts, there is real streamlining. Marketing has been hit hardest."

Mahoney denied this saying there had only been three job losses across the board in recent weeks.