Saudi prince claims Dubai real estate is not ready to recover
Prices must lower substantially for demand to reach equilibrium with supply he says
The nephew of Saudi Arabia’s King Abdullah has told reporters that Dubai’s real estate sector is yet to hit its lowest point.
“There are new buildings coming out. I think we have not seen the bottom in real estate; there are years to come,” Prince Alwaleed bin Talal was quoted as saying by news agency AFP.
“The price has to go down substantially for demand to reach equilibrium with supply. Many landowners are holding their old prices. Someone has to give in. The price has to go down, substantially. It’s supply and demand – it’s a no-brainer,” he added.
Dubai Real Estate Authority (DERA) has already cancelled 480 projects of the 930 registered with the body; apparently in a bid to reduce supply.
Phil Sherridan, group chief executive of international realtors Fine and Country, predicted Dubai’s conductive business environment could lead to sector recovery in two years; depending on “realistic lending” and a revision of the residency visa rule.
“In the short term there is little doubt the oversupply will keep prices depressed, but I detect a ‘bottoming in the market’ for ready properties. As liquidity improves, so the supply and demand equilibrium will marginalise, but in my view, property prices remain full.
“That said, Dubai is an attractive place to live and work and for so long as it remains free of direct taxation, so businesses will identify with the Emirate and facilitate it to flourish once again.”
Commenting on the lack of regulatory framework and property law, Sherridan said: “[This] sould have been in place”.
“There is much competition around the world and it will not be easy for tarnished Dubai to re-invent itself, but I believe it will.”
