Dubai Forms Committee to Combat Property Glut After Prices Plunge
Dubai will set up a committee to balance property supply, demand as a slump in prices weighs on developers in the business hub.
(Bloomberg) -- Dubai will set up a committee to balance property supply and demand as a slump in prices weighs on developers in the Middle East’s business hub.
The emirate’s ruler Sheikh Mohammed Bin Rashid Al Maktoum said in a tweet he wanted the committee to ensure that “semi-government real estate companies in Dubai won’t compete with private-sector investors.”
Members of the committee will include companies such as Emaar Properties PJSC, Nakheel PJSC, Dubai Properties Group and Meraas Holding LLC, according to a statement posted on the government’s Media Office website.
Property prices in the U.A.E., the second-biggest Arab economy, have dropped about 27% since October 2014 amid excess supply and sluggish economic growth. S&P Global Ratings expects prices in Dubai to fall by another 5% to 10% this year.
The committee is “a step in the right direction,” said Khatija Haque, the head of Middle East and North Africa research at Emirates NBD in Dubai. “There’s a lot of concern that it may be too little too late, because we already have a number of projects underway which are going to be delivering 15,000 to 20,000 units per year for the next two years.”
The Dubai Financial Market Real Estate Index lost 2% on Tuesday, trimming this year’s gain to 6.4%. The measure tumbled 39% in 2018.
To contact the reporter on this story: Abeer Abu Omar in Dubai at aabuomar@bloomberg.net
To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Shaji Mathew, Nour Al Ali
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