Dubai's Shaibani Says Property Slump Helps Competitive Positionby
Says will take time for property oversupply to be absorbed
Sees positive longer-term trend for property ahead of Expo
Falling property prices in Dubai will help keep the emirate competitive as a business hub for the Middle East and Africa region, according to Mohammed Al Shaibani, chief executive officer of Investment Corp. of Dubai and a top government official.
The oversupply of properties will take some time to be digested by the market, said Al Shaibani, who is also director general of the Dubai Ruler’s Court. The outlook for real estate prices is more positive over the longer term as the emirate prepares to host the World Expo in 2020 and develops a new business cluster around the Al-Maktoum International airport, he said. The 140-square kilometer area around the airport, known as Dubai South, will feature residential, commercial and leisure areas.
“Real estate has its own mind, you cannot engineer it,” Al Shaibani said. “You try your best to manage supply and demand but so far nobody has managed to master this, no matter how much you plan. There is some oversupply that will take time to be absorbed. It’s important we give value for money as in the bigger picture we have to stay competitive.”
Real estate prices in Dubai will probably decline as much as 20 percent this year and could keep falling in 2016, Standard & Poor’s said earlier this month. Prices had soared about 70 percent between mid-2011 and mid-2014, according to figures by real estate consultancy Phidar Advisory. Steep increases in property prices had put pressure on affordability for many residents.