Font Size

- Aa +

Tue 22 Nov 2011 07:39 AM

Font Size

- Aa +

Worst is over for Dubai property, says Alabbar

House prices flatlining as investors seek safe haven buys, says Emaar chairman

Worst is over for Dubai property, says Alabbar
Overall real estate prices have stabilised in Dubai, said Emaar boss Mohamed Alabbar
Worst is over for Dubai property, says Alabbar
Worst is over for Dubai property, says Alabbar
Worst is over for Dubai property, says Alabbar

House prices in Dubai have hit bottom and are starting to show signs of recovery as political turmoil elsewhere in the region prompts investors to look for safe-haven buys, the chairman of Emaar Properties said.

Villa and apartment prices in the Gulf emirate, which have slumped more than 60 percent from their 2008-peak, are stabilising or beginning to pick-up, said Mohamed Alabbar.

“I believe overall prices have stabilised; I think they are still holding reasonable value to, say, two years ago, so I believe the worst is behind us,” he said on the sidelines of the Arabian Business Achievement Awards.

The emirate saw less than 1,700 real estate deals in the first ten months of the year, data from Dubai Land Department showed last week. Some 1,603 deals were signed off in the ten months to October, down from 5,363 during the same period in 2008.

But the figures reflect a 37 percent increase in property transactions when compared to 2009 at the height of the financial crisis, suggesting fledgling signs of recovery that may be linked to the wave of Arab Spring unrest that has rocked economies in the region.

 “I don't expect the Europe disaster to come and hit us in any way but also unfortunately the instability that is going on in the region has supported us as well,” Alabbar said.

“We want them all to prosper, we don't want anyone to have a disaster but it’s a fact that it’s affecting us positively.”

Property prices in Dubai soared after the city opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments. Between 2007 and mid-2008 prices in the emirate rallied almost 80 percent, according to Morgan Stanley.

But the market saw the biggest regional collapse in house prices in the wake of the financial crisis, as speculators fled the market and credit lines dried up.

House prices showed signs of recovery in the third quarter, with slight rises in prime projects such as Palm Jumeirah and Arabian Ranches, Jones Lang LaSalle said in September.

But analysts remain concerned that the estimated 33,000 new homes scheduled to hit Dubai’s market by end-2012 could cause fresh declines in rental and sale prices. Renewed global financial woes and the European sovereign debt crisis are also likely to cause more pain, with Moody's last month predicting any price recovery to be delayed to 2016.

The emirate’s still suppressed real estate prices could be a driver behind sales, said Ziad Makhzoumi, CFO of Arabtec, the UAE’s largest builder by market value.

“I believe [we will see price increases next year], but not everywhere. In certain areas they’re bound to,” he said on the sidelines of the 5th Arabian Business forum on Monday.

“Among the reasons for the optimism is that the assets are still undervalued so there is no issue of valuation going against them. Credit has not increased in the last few years [to real estate], so no one has borrowed more either. That makes the market even more stable.

There seems to be more demand in Business Bay for example, and it seems to be filling up quite quickly. I also understand that the rents are going up in some areas again.”

*Additional reporting by Elizabeth Broomhall

Jag 7 years ago

The 'worst is over' does not mean that good times are around the corner!

It will be 2-3 years before real estate prices across the board start inching their way up. Till then it's pretty much a flat curve with minor bumps either up or down..

Kohinoor 7 years ago

Worst is over, other economies are moving upwards. But still our developers are sending shiver among investors with their multiple invention of charges day by day.
At this phase, shouldnt be surprised if entry to the malls, parks, elevators are charged for. Authorities should intervene and build investors confidence.

CGBS 7 years ago

a flat curve?

Walid 7 years ago

Every year they say so but nothing is changing!!

Peter 7 years ago

The 'worst is over' says Emaar. “Rents are still falling” says tenants

Dubai properties 7 years ago

Property prices are slowly creeping upwards but it does not mean profits will be available every other day. The task is slow and tedious and patience is needed to see the good old days once more.

telcoguy 7 years ago

@CGBS, well technically speaking a flat line is a special case of a curve, one where the radius is infinite at each point
@Kohinoor, which economies are "moving upwards"? Not Europe, not the US, not Japan (on a meaningful way anyhow)
LatAm is ripe for a crash (Argentina in 20112, Brasil in 2014 at latest), China is slowing down... there is little left. India maybe, but I am not sure internal demand only will keep it going.

Red Neck 7 years ago

We dont see Dubai RE market with the same lenses then

Singh 7 years ago

If Mr. Emaar is telling Worst is over. Then why he is investing his fortune in Nigeria not in UAE???

SAS 7 years ago

The prices were highly inflated 3 years ago all because the greedy real eastate companies wanted to make lots of money quickly. The prices are actually going to what they should have originally been so don't expect another bubble in the RE market.