Dubai: Dubai's largest developer is temporarily halting new projects amid a property glut that, combined with the pandemic, has shaved nearly a third off house prices in the past six years.
"We don't build anymore," Emaar Properties' Mohamed Alabbar said at a conference in Dubai. "The government entities decided to stop new developments almost a year back, but COVID-19 definitely put the brakes on."
The comments marked a rare admission from Emaar, which for years has resisted calls to stop construction even as new properties flooded the market and drove down values. Home prices in Dubai slumped by more than 30 per cent since 2014, forcing the government to set up a committee to manage supply and demand.
Need to halt
Alabbar was criticized by Damac Properties Chairman Hussain Sajwani last year in perpetuating the city's oversupply. Sajwani said Emaar offered payment plans that encouraged speculation and wouldn't slow building even when the majority of other big developers, including Meraas Holding and Nakheel, did.
With the onset of the pandemic, property companies worried about their cashflow and stopped projects as demand from foreign and local investors evaporated. Alabbar said demand is now picking up amid discounts offered by developers. Demand from buyers in India, Russia and Saudi Arabia is strong, he said.
No noon stake sale
"We are four years old and growing fast, we don't think we should put it under quarterly results pressure," he said. "We want to make the right decision, we need to plan ahead and I think we are on the right track."