Dubai: While the coronavirus is wreaking havoc around the world, it could give Dubai's long-slumping property market a much-needed break from new projects, Damac Properties' chief has said.
"If there is a silver lining to this crisis, it's that now everybody is going to halt new projects at least for a while," according to Hussain Sajwani, chairman. "The reality on the ground is dictating the situation."
Dubai's developers have continued to build homes and start big new projects despite six years of falling prices and unmistakable signs of oversupply in the market. Now the double hit of the virus crisis and a partly related plunge in oil prices means buyers will have considerably less cash to pay for new homes.
Developers have no choice but to halt projects "because their receivables are going to be huge" if they continue, Sajwani said. He has long criticized his competitors, some of them state-owned, for being unwilling to band together and set limits on new developments. In October, he warned that Dubai could face a disaster if it fails to halt all new home construction for one or two years.
"I don't think there will be new launches in 2020 or most of 2021," Sajwani said. The market may start inching upward by October 2021, when Dubai is set to open the World Expo originally scheduled for this year, he said.
Damac is focusing on selling its existing inventories and is offering discounts to customers willing to pay ahead of schedule for homes purchased before the pandemic hit.
The company also reduced prices of properties in developments by as much as 10 per cent to entice buyers, the chairman said."We are seeing a lot of customers looking for bargains" even amid the lockdown, he said. "Sometimes the offered price is ridiculous, but often it's something we can negotiate."