By Ed Attwood
Head of Arabtec warns that Dubai needs time to absorb oversupply.
The head of the Gulf’s largest construction and engineering company has warned that the oversupply in the Dubai property market will continue for another four to five years.
“A lot of the new property completed – around 40,000 units this year – will take time to be absorbed. It’s back to the basics of supply and demand, and there will be more projects next year,” said Arabtec CEO Riad Kamal at the AB conference on Monday.
“I feel that Dubai will need a minimum of four to five years before it can absorb that supply.”
But Kamal said that the Dubai real estate market remained a sound investment.
“There are a lot of wealthy international and regional investors who have bought second, third and holiday homes here and they will not be selling these properties, “ the Arabtec head added.
“And ask any graduate in the Arab world where he or she would like to go and work and they will immediately say Dubai. That will continue to be the case. We just need to the government to find its way and meet its financial commitment.”
Kamal also indicated that there had been a recent clear trend away from private projects as a result of the recession.
“The banks are holding back in financing private projects; but as long as the oil price remains remains above $70 there will be an abundance of liquidity in the coffers of the oil-producing countries to deliver on national infrastructure projects."For all the latest UAE 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.
At last a sensible view, by a proper expert on the lie of the land for the Dubai Real Estate market. Another 4-5 years to get back on track. Something we all knew but never been admitted before
The global economy is also not in great shape to say the least and that will hold Dubai back as a global business city, see: http://www.arabianmoney.net/banking-finance/2010/06/28/dubai-recovery-patchy-and-slow-due-to-debt-property-and-global-economy/
Oversupply, greedy developers, lack of transperancy, no laws implementations or laws protecting investors. This is a dangerous cocktail. 4 or 5 years are ok if the other things are solved quickly. If not you can say that it will never recover or at least for the next 10 years
I thank Mr. Kamal for being an honest man talking as a credible source. I wonder if CEO's of property developers who are trying to trash the market with new units of cheap quality would stop and learn something for the good of Dubai and their country! Have you woken up yet to the real picture? or do you still see under your feet? I also wonder if the Mortgage lenders who are operating with 8% to 9% interest rates which has crippled investors and I mean specifically AMLAK and TAMWEEL do your Executives read the news online? Do they understand economics? Do they have a customer retention plan or should I say a customer busting plan until they make it a Ghost house!! I just hope that these blogs are picked up by a sensible Government activist who can actually do something with it. We all love Dubai and we want to see it back again in its shiny glamour but please clean up the unexperienced batch that are still there who are hampering the growth and recovery!
1st I bought in Dubai and as an Egyptian I must thank Dubai for setting a great example for a lot of arab countries who followed it in many ways and styles and maybe other EU and Far East cities also did the same . I will talk UAE now and not Dubai because this how it should be from the begining actually .UAE need to think why an investor will buy a property in it NOW and not 2 yrs ago . For example , people visit and rent in London for education , healthcare and maybe work in addition to tourism to some extent . Paris for tourism , education and connections to Europe . Cairo population is huge and there is ALWAYS shortage in real estate projects . Looking at UAE , it is supposed only to be tourism and potentially someone who is doing business with the Middle East and take UAE as a hub , with the current situation in UAE and the 287,000 appartments coming empty end of this year ( Dubai only ) these reasons need more meat and need to have more reasons why people should live here .Nice infrastructre is not a reason since you still need a job or any source of income to live here . Above all this I found out that regulations/rules/transparency are the highest reasons for buying a property in any country . So my sincere advice to the UAE leaders and managers is to fix the regulations and be transparent in all news 1st and then Im sure you will fill out these properties inshalla . my 2 Dhms ..
Stop denying that these leaders have made a gigantic mess. They lost a lots of money and will not pull out a Dirham and also are not willing to compromise with regulations that could give rights and security to expat citizens of Dubai and possible investors. The country will be washed away in 3 generations if they don't take action. It's already the biggest RE debacle of all times.
And I think that this oversupply is also one of the main reasons behind the Dubai real estate business crisis but in my view, it would not take much time for Dubai to recover its earlier position and Dubai authorities are working hard for this. There is also a news that transactions have increased during the first 5 months of this year.