Besides the fact that it is THE luxury event of the yearMay 27, 2015 9:48
Tasweek: ‘Maintain and sustain’ real estate sector
Real estate boss Masood Al Awar says a number of sample regulations could instill trust in Dubai's real estate sector.
April 18, 2013 4:11 by Muhammad Aldalou
At the forefront of every year, a real estate veteran in Dubai picks two defining words he predicts will encapsulate the Emirate’s real estate sector for the year ahead. Masood Al Awar – former Emaar executive and current CEO of property developer Tasweek – has, for this year, chosen ‘maintain and sustain’. If you don’t maintain your position, you can’t sustain your growth, he says.
In 2010, the words were ‘pretend and extend’, the following year was tagged ‘delay and pray’, while 2012 ‘surrender and murder’ were the words of choice. “And that actually lasted up until the last quarter,” he laughs.
In a recent interview with Arabian Business, he insisted that real estate speculation in Dubai will never stop. The act of purchasing property for the sole intent of almost instantly selling it off at a higher mark-up – also known as ‘flipping’ – was deemed one of the main factors that contributed to Dubai’s property bubble bursting in 2008 and 2009.
A prime example would be Emaar’s recent (and highly-publicised) offering of its Reem development, where hundreds queued up to buy properties by the scoop – only to sell or advertise them minutes, hours or a few days later.
Al Awar tells Kipp that back when he sold his first property, terms of the agreement stipulated the buyer couldn’t re-sell until he or she actually received the property. Obviously, that regulation is long gone. “If that rule is implemented now, nobody would be able to re-sell and you’d be stopping people from making money,” he says. “Suddenly, we have one million properties, with people fighting over them and the chance for more developments.”
He affirms that speculation can actually be good for the market – providing it doesn’t get out of hand – because it adds credibility, value and reveals a forceful demand for particular developments. According to him, Rera cannot influence the individual human behaviour of buying and selling, but a few developers can help add regulations protect the market. “As a suggestion, we could have a rule that only when a property reaches the ‘groundbreaking’ phase, only then can you sell,” he says. That way, he insists, everyone will have more belief and faith in the sector.
Interestingly enough, Al Awar did mention (in AB‘s interview) that if buyers hold on to their properties longer, they’d be able to make more money than selling it within a matter of days. “Yes, but that requires a marketing scheme which we’re working on and plan to announce in a couple of months.”
Still, many spectators still argue that ‘flipping’ – particularly when done so rapidly with an enormous amount of hype – is a ‘pre-2008′ mistake the industry shouldn’t be repeating.
“There are generally four market forces – including buying power, competitive rivalry and industry power,” Al Awar assures us. “If all those become strong, then I think nothing can be stopped.”