Property giant's chairman vows to keep supplying new homes to help hold prices at 'reasonable level'
The chairman of Dubai's biggest real estate developer, Emaar Properties, said he welcomed talk of a slowdown in the emirate's property market and vowed to keep supplying new homes to help hold prices at "a reasonable level".
Dubai real estate has gone from boom to bust to boom again in the space of eight years. The market soared late in the last decade, then crashed as a bubble burst, cutting residential prices by more than half and nearly causing Dubai to default on its debt.
Since then, an influx of foreign money, particularly from Arab countries blighted by war and civil unrest, has helped Dubai's property sector rebound strongly. Prices are now roughly around pre-crisis levels, up by about a third from a year ago.
"We will continue to supply the market - supply in the market is good for our customers because it keeps prices at a reasonable level," Emaar chairman Mohamed Alabbar told reporters on Monday.
"In 2013, things went crazy because supply was limited. For me as a long-term developer, this spike scares me, so I'm glad people are saying, 'Oh, the market is cooling down.' I think that is healthy."
Alabbar was speaking at the launch of the first phase of a huge new high-end residential development called Dubai Creek Harbour, a joint project between Emaar and Dubai Holding, the personal investment vehicle of Dubai's ruler Sheikh Mohammed bin Rashid Al Maktoum.
The entire project is slated eventually to cover nearly 1,500 acres and include two towers that the developer says will be the tallest twin towers in the world.
Earlier in the day a senior official of the International Monetary Fund said rises in Dubai property prices had moderated, and were now less of a concern to the IMF. Previously, the IMF had warned that rapid price rises could lead to another bubble and crash in the sector.
A September report by property consultants JLL found Dubai's residential rents and sales prices rose 2 percent and 1 percent respectively in the third quarter of 2014 compared to the previous quarter. That was slower than 3 percent and 6 percent increases in the second quarter.
The announcement of The Harbour at The Lagoons is mind boggling. An area which will be 3 times the size of Downtown Dubai. It is clear what direction the property prices will continue to go with all of this supply planned in the pipeline - good for Dubai as we need lower cost of living to ensure the city remains competitive.
Thought Mr. Al Abbar was smart and enterprising - disappointed by his thoughts - " ......will keep supplying new projects.........."