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29 March 2024

Dubai property price spikes scare me: Alabbar

Published
By Parag Deulgaonkar

Emaar Properties Chairman Mohamed Alabbar on Monday said the property price spikes in Dubai scare him, but the market has now cooled and is healthy.

“In 2013, things went crazy because supply was limited. As a long-term developer, this spike scares me. I am glad that people are saying that 'the market is cooling down', and that is healthy,” Alabbar told reporters after announcing the launch of Dubai Creek Residences in Dubai Creek Harbour at The Lagoons, a six-million square metre urban district.

Dubai Creek Residences is being developed in joint venture with Dubai Holding, a global investment conglomerate, which owns the plot of land on Dubai Creek. The master development will includes the world’s tallest twin towers.

Sales of the first two towers in Dubai Creek Residences, a project comprising six towers, will commence on November 1.

Emaar Chief said they were expecting to complete the two towers in 30 months' time, but remained non-committal on the completion date of The Lagoons master development, which is three times the size of Downtown Dubai.

In September, Knight Frank said prices had slowed down, but compared to 53 other global cities property price were still increasing at the fastest pace in the world.

Dubai saw annual price growth of 24 per cent though it slipped from 27.7 per cent in the year to March 2014, the UK-based consultancy said.

Affordability is critical

Alabbar said 'affordability' was a very critical issue though everybody (developers) wanted real estate prices to move up.

“There is something called affordability level and as a long-term player in the market that is perfect… we don’t want a market that is ‘running out of control’.”

He added that they had a lot of projects on hand and were running full steam.

“There is a lot in the kitchen and I would like to be realistic to say that our bandwidth is full and we are running day and night.”

Emaar chairman, however, said there was no stopping at the moment and they would like to remain the 'main trusted supplier' in the Dubai market.

“We would like to supply to the market if they want it. We are running full steam because we are in competition. If we can be the main trusted supplier, we would love to be one,” he asserted.

Dubai Holding Chief Executive Officer Ahmad Bin Byat said: “All stakeholders in Dubai’s property market have learnt the lessons. This is a long-term project and that there will be certain periods of slow demand is a fact of life, but what it all boils down to is whether there is enough supply and demand happening in the market.”

Dubai Land Department has taken steps to ensure that real estate developers complete their projects by seeking 100 per cent payment on land, with construction guarantees from the developer and contractor.

Besides, the DLD has recently launched service and maintenance charge index and plans to introduce the Real Estate Investor Protection Law to bring transparency and share information with the public and investors.