A senior executive at the Dubai developer Damac has dismissed speculation that a second property ‘bubble’ is in the making, saying that the previous market crash was purely due to the financial crisis.
House prices in the emirate plummeted in the wake of the economic downturn, with property losing more than 50 per cent of its value. Before 2008, the market had been driven by exuberance and the widespread practice of ‘flipping’, where off-plan properties were sold on for profit by investors.
Some analysts have warned that a second bubble could be about to burst, given the recovery in the market that saw Dubai top a recent list of global house-price rises.
But Ziad El Chaar, managing director at Damac Properties, denies there was ever a ‘bubble’ in Dubai’s property market – and cast doubt over whether the current market is at risk of becoming overheated.
“We are talking about a new bubble [but] I don’t know what the old bubble is,” El Chaar told Al Arabiya.
“In 2008, there was a financial crisis that affected the real estate market – but demand for property in Dubai is steady [over] the last ten years.”
El Chaar, speaking at the annual Cityscape exhibition in Dubai, added that the luxury real estate market in Saudi Arabia is still limited despite the high demand.
“These kind of projects are few in Saudi Arabia, in both Jeddah and Riyadh. (However) we see that it’s a promising market as demand is increasing,” El Chaar said.