{"id":7196,"date":"2016-03-08T17:00:57","date_gmt":"2016-03-08T10:00:57","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=7196"},"modified":"2016-03-08T14:30:04","modified_gmt":"2016-03-08T07:30:04","slug":"dubai-developers-keep-building-and-remain-upbeat-despite-weak-market","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-developers-keep-building-and-remain-upbeat-despite-weak-market\/","title":{"rendered":"Dubai developers keep building and remain upbeat despite weak market"},"content":{"rendered":"


\n
\nDubai developers are pressing ahead with their construction plans despite expectations that property prices will fall yet further this year, undaunted by memories of a 2008 crash.Industry consultants say that while sales volumes have slumped in the emirate, structural changes to the market such as tighter regulations together with fewer speculators and developers should ensure a much softer landing this time.
\nBut others worry about ripple effects from the dive in oil prices, even though Dubai is a small crude producer compared with fellow emirate Abu Dhabi, and wonder how all the projects that are being announced will be funded.Residential prices in the emirate fell 50 per cent from a third-quarter 2008 peak to mid-2009, suffering a second downturn in early 2010, industry consultants Cluttons estimate.Prices then rebounded from 2011 following an influx of money and people displaced by uprisings in several Arab countries, recovering to within 18 per cent of 2008 peaks.
\nBut values slipped again from late 2014. Cluttons reckons they fell 3-5 per cent in 2015 and forecasts a similar drop this year; rivals CBRE say prices declined about 15 per cent last year and predict another 10 per cent drop in 2016.This seems to have swayed developers little.Emaar Properties says it will not change its plans despite sales revenue falling 28 per cent to Dh7.51 billion in the first nine months of 2015.
\n“Emaar is progressing as scheduled with all its projects launched,” said a spokesman for Emaar, builder of the world’s tallest tower, the Burj Khalifa.The company, one of four big players in the Dubai market, has a backlog of projects worth Dh24.1bn in the wider UAE.”Sales enquiries have continued to be robust, led by strong interest from regional and international investors,” said the spokesman.Property markets can be driven as much by sentiment as supply and demand, so such overt bullishness is perhaps understandable. However, it ignores a 19 percent decline in Dubai unit sales and a 24 percent drop in the combined sales value in 2015, CBRE estimates.
\nIt also echoes 2008 when that October the developer Nakheel announced plans to build a kilometre-high tower, which at almost 200 metres more than the Burj Khalifa would be a global record.Barely a year later, Nakheel sought to restructure about $11 billion in borrowings and property prices were in free fall. Today a Dubai metro station is named after the lofty project, but the tower has yet to materialise.
\n\u2022 Where Dubai rents have risen and fallen, 2015 – in picturesDubai has doubled property transaction fees and imposed tougher deposit requirements for mortgage borrowers. While this has helped to prompt the current downtrend, inflicting such short-term pain may ultimately lessen volatility by minimising speculative trading.This marks a significant change from 2008. “The dynamics of the market this time around are vastly different … The fundamentals are a lot stronger,” said Faisal Durrani, partner and head of research at Cluttons.
\nDamac Properties, Dubai’s largest independent developer, also says it has not slowed construction as there is demand waiting to be met.”There will continue to be an under-supply of completed units in the market; based on Dubai’s economic growth, demand should outstrip supply,” said a Damac spokesman. “It’s very much business as usual.”Dubai officials have remained optimistic on economic growth in the emirate which has diversified into areas such as tourism more than larger oil exporters. In December, a government official estimated 2015 growth at around 4 per cent, close to levels of recent years.
\nHowever, the UAE has said it will be hard to achieve growth of more than 3 per cent across the emirates this year.The spectre of over-supply still haunts the property market after the crash, which was partly due to an abundance of units being completed almost at the same time.To avoid a repeat, developers are widely thought to delay handing over units when they are completed, although of course this means they get no money from them until a sale goes ahead.
\nOver the last five years only about 35 per cent of residential units slated for handover in a given year were delivered to buyers, consultants JLL estimates, with sales delayed until subsequent years.Oil is thought to constitute only about 4-5 per cent of Dubai’s economy, but the effect of the crude price slump will be greater than this figure implies.”There’s a ripple effect (into) office demand, the amount of trade hotels get, business activity, amount of flights, retail spend,” said Alan Robertson, JLL’s MENA chief executive.
\nLower oil receipts have tightened liquidity. Government deposits in the UAE banking system fell by Dh56bn in the 12 months to September 2015, National Bank of Abu Dhabi reported.”This will have a direct impact on the mortgage market, which is already very restrictive,” said Clutton’s Durrani.Project funding is likely to be a problem this year.”There are a lot of new projects being announced but where are they all going to get the money from?” said Craig Plumb, JLL MENA Head of Research.
\nOf the four developers that dominate in Dubai, three – Emaar, Nakheel and Dubai Properties – are ultimately state-controlled, making it easier to coordinate supply.Currency fluctuations are another factor. Foreigners accounted for four-fifths of the combined value of Dubai property purchases in 2015, CBRE says, with Indians, Britons and Pakistanis among the biggest non-Emirati buyers.The dollar, against which the UAE dirham is pegged, has gained about a fifth versus the euro and sterling since mid-2014. The Indian rupee has likewise lost ground.
\nThis has made Dubai property more expensive for potential buyers with money in those currencies, but has also offset the drop in values for existing owners from those currency zones.”People who really want to sell are willing to accept considerably lower prices,” said Alexander von Sayn-Wittgenstein, sales director at luxury property broker Luxhabitat.”The official price may be the same but when a buyer makes an offer that is much lower, the seller is more flexible and will likely accept a price they wouldn’t have a year ago.”
\nGulf property markets have generally weakened although Dubai is most volatile because it has made the biggest gains.”The underlying factors are broadly the same – such as oil prices, lower state spending and the need for governments to raise taxes which will add to inflationary pressures,” said JLL’s Plumb.Most analysts predict Dubai’s hosting of the Expo 2020 exhibition will help the residential market bottom out over the next 12 months. Demographic trends are also favourable, with the city’s population forecast to double to 5 million by 2030.
\nIf correct, this will help construction. “We (would) need another city the size of current Dubai,” said Durrani. “This suggests that Dubai’s development story still has a long way to go.”business@thenational.aeFollow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Dubai developers keep building and remain upbeat despite weak market<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Dubai developers are pressing ahead with their construction plans despite expectations that property prices...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-7196","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-1S4","jetpack-related-posts":[{"id":7226,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-developers-keep-building-despite-weak-market-and-echoes-of-2008\/","url_meta":{"origin":7196,"position":0},"title":"Dubai developers keep building despite weak market and echoes of 2008","date":"March 8, 2016","format":false,"excerpt":"\r Developers say construction continues unabated in emirate, despite falling prices, sales volumes in 2015\r \r Source : arabianbusiness.com\r Read more...Dubai developers keep building despite weak market and echoes of 2008","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":420,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/new-twist-in-dubais-property-data-row\/","url_meta":{"origin":7196,"position":1},"title":"New twist in Dubai’s property data row","date":"December 22, 2015","format":false,"excerpt":"\r \r Reidin, Dubai\u2019s major property data provider, said yesterday that developers supplied just 9,397 units in 2015 \u2013 compared with start-of-the-year projections from other sources that 25,000 units would be handed over. This is the latest chapter in an argument between property developers and brokerages over the outlook for\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":44972,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-issues-new-rules-for-brokers-marketing-overseas-properties-in-the-emirate\/","url_meta":{"origin":7196,"position":2},"title":"Dubai issues new rules for brokers marketing overseas properties in the emirate","date":"February 22, 2017","format":false,"excerpt":"\r Dubai Land Department (DLD) has issued a new set of rules governing how brokers can sell overseas properties in the emirate in a bid to prevent potential investors from being ripped off.DLD's new rules require a broker selling properties outside the UAE to gain a permit for marketing them\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":164533,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-launches-ai-in-the-sky-drones-to-monitor-green-spaces-across-emirate\/","url_meta":{"origin":7196,"position":3},"title":"Dubai launches AI in the sky drones to monitor green spaces across emirate","date":"November 11, 2025","format":false,"excerpt":"\r Dubai launches \u2018AI in the sky\u2019, a drone-based system to monitor 52m sqm of green spaces and boost urban sustainability The post Dubai launches AI in the sky drones to monitor green spaces across emirate appeared first on Arabian Business: Latest News on the Middle East, Real Estate, Finance,\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2025\/11\/Exterior-of-Dubai-Municipality-Building-1000x667-1.jpg?fit=1000%2C667&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":150298,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/the-dubai-100-the-most-influential-people-in-the-emirate-2025\/","url_meta":{"origin":7196,"position":4},"title":"The Dubai 100: The most influential people in the emirate 2025","date":"March 26, 2025","format":false,"excerpt":"\r The Dubai 100 is the definitive ranking of those shaping the emirate\u2019s future, spanning business, government, culture, and technology\r \r Source : arabianbusiness.com\r Read more...The Dubai 100: The most influential people in the emirate 2025","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2025\/03\/Dubai-100-2025-power-list-1000x667-1.jpg?fit=1000%2C667&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":39057,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-homes-at-their-cheapest-in-5-years\/","url_meta":{"origin":7196,"position":5},"title":"Dubai homes at their cheapest in 5 years","date":"December 27, 2016","format":false,"excerpt":"\r Low oil prices and a strong US dollar are banes for the emirate Burj Khalifa rises above the busy streets of Dubai.\u00a0Dmitry Birin \/ Shutterstock.com The transaction volume of off-plan and existing homes in Dubai in the third quarter stood at 900 units, Mansion Global reported, citing a report\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/7196"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=7196"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/7196\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=7196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=7196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=7196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}