Inflation will not hurt property demand: Emaar

Dubai: Emaar Properties said yesterday that soaring inflation in the UAE was unlikely to hit demand for real estate in the second-largest Arab economy.

Inflation in the UAE probably soared to an at least 20-year peak of 11.4 per cent last year from 9.3 per cent a year earlier, according to a Reuters poll last month, as rents and food prices jumped.

"It will not impact [demand] because it is a global phenomenon," Emaar chairman Mohammad Al Abbar told Reuters on the sidelines of a news conference in response to a question regarding the impact of price rises on property demand. Increases in raw material prices, Al Abbar said, are not a worrying factor as most of its projects are long-term and the company procures raw materials in bulk. Property prices have been soaring in the UAE as supply fails to keep up with demand.

Dubai kicked off the property boom when it first allowed foreigners to invest in property in 2002.

Emaar posted its second decline in profit in three quarters in April as revenue stagnated and marketing and selling costs rose.

Yesterday at the news conference, Emaar unveiled a water fountain project, to be operational by March 2009.

The total development value of the Burj Dubai Lake, the fountain and its advanced filtrations systems is Dh800 million. The company believes that the fountain, along the lines of The Fountains at Bellagio in Las Vegas but 25 per cent larger, will be a major tourist attraction, drawing over 10 million visitors annually.