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Damac chief hits out at Dubai brokerages over property market reports

Damac Properties has accused some of the real estate sector’s biggest brokerages of “professional malpractice” by publishing Dubai market reports forecasting excess supply.

Ziad El Chaar, managing director of the developer, slammed data put out by property brokers as inaccurate and damaging to market sentiment, in an open letter sent to media yesterday.

Without naming any particular agency, Mr El Chaar criticised reports at the start of the year predicting that as many as 25,000 homes would be handed over in Dubai in 2015.

“We announced to the market at the start of the year that we would hand over between 2,000 to 2,500 units over the course of 2015. Of that number, around 1,500 would be in Dubai. We remain on target to achieve this figure,” he said.

“One of the other large developers in Dubai, Emaar Properties, has told the market it will hand over circa 800 units in Dubai this year. That’s almost 2,500 units from the two developers that make up over 50 per cent of all the current inventory handovers in Dubai. So it begs the question … where are the 25,000 total handovers in Dubai in 2015 which was predicted within market research reports?”

Mr El Chaar said that while “such predictions help companies gain exposure and perceived authority … they also have a detrimental effect on the generally positive sentiment in the market and they also have the danger of turning people away from what remains a strong and well regulated market place”.

A Damac spokesman said that the developer had decided to speak up on the issue as a “leader in the market” and that such reports have had no impact on Damac’s own sales figures or ratings.

JLL, the international property consultancy, at the start of the year forecast that 25,000 homes were expected to be completed in 2015.

Yesterday, JLL declined to respond to Mr El Chaar’s comments. CBRE said in December that 65,000 new units could enter the market between 2015 and 2017.

Nick Maclean, managing director for CBRE in the Middle East, said yesterday that the broker is confident of its findings and that the issue in the Dubai market is one of affordability and not supply. “We compile our price information from data from Reidin, the Dubai Land Department and our own valuation department. In terms of future supply, if clients decide to elongate the development process then the numbers will not be accurate at that time but in general we’re fairly confident in our numbers,” he said.

“What we are seeing is a reaction to excessive price rises in 2013.” Faisal Durrani, the head of research at Cluttons, said yesterday it expects “something in the region of 20,000 units to be delivered in the city’s freehold areas between now and the end of 2017, most of which will be villas, 70 per cent to be exact”.

Some brokers admit, however, that figures can sometimes “slip” as developers decide to phase projects differently in reaction to market conditions.

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