Emaar Properties, the largest listed developer in Dubai, has halted new-build projects owing to an oversupply of properties and a fall in demand caused by the coronavirus pandemic.
Bloomberg reports that Mohamed Alabbar, the company’s chairman, told a UAE-Israel business conference in Dubai on Monday: "We don’t build anymore. The government entities decided to stop new developments almost a year back, but Covid definitely put the brakes on."Â
The statement follows reports earlier this year that the company had halted work on a number of major projects in the emirate.
Bloomberg notes that Emaar has resisted calls in recent years to stop construction in order to prevent a glut of supply, despite a 30% fall in house prices since 2014.
Most of the emirate’s other major developers, such as Damac Properties, Meraas Holding and Nakheel, have cut back their development plans in an attempt to maintain price levels.
Alabbar, who was speaking at the Future Digital Economy Summit, added that real estate was a cyclical business, and he was seeing a rise in demand. He said: "We have an oversupply, but Dubai is reasonably priced … good demand continues from India, Saudi Arabia, Russia and China."
Emaar was selling about $15m of property a day before the pandemic. After a crash in sales, it has now recovered to $12m a day, according to Alabbar.
In November, Emaar Malls announced a net profit of $160m for the period through to 30 September, compared with $472m for the same period in 2019.
In April of this year, the Reuters agency reported that Emaar had suspended work on major projects in Dubai. Citing unnamed sources, it said the suspensions included Dubai Creek Harbour, a megaproject that is to build homes for 200,000 people, and the Dubai Creek Harbour Tower (pictured), which will be the world’s tallest building.Â
Image: Among Emaar’s projects is the Dubai Creek Tower (Emaar)
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What I don’t understand how are they coming up with the figure of 30% fall in house prices. I have been in Real Estate for 15 years in Dubai. The property price has fallen more than 50% and the rents have fallen more than 60%.