Common sense, Emaar and Dubai’s real estate market
While Emaar savours a PR coup, what message does it relay about the emirate's real estate sector, wonders Alex Malouf.
April 15, 2013 2:18 by kippreport
Common sense would have told Emaar by Friday evening that there would be mayhem ahead. Judging by the number of labourers already queuing up in the days beforehand, Emaar should, and I am sure would, have known that the amount of interest in purchasing the villas at Emaar’s advertised prices would have been far too much to control and that the company would have to resort to alternative means to sell each lot.
Common sense (or even those queuing up) would also have told Emaar that many of the buyers were real estate investors looking to flip properties days or even hours after the sale. And common sense should have told someone that with talk of Dubai’s real estate market heating up again, the last thing the Emirate needs is videos of crowds fighting with security, of police being called in to re-assert control, and of website message boards condemning the company and the scenes above as a puppet show.
It’s no exaggeration to say that real estate in Dubai has had its ups and downs over the past ten years, but the signs are that Dubai’s property market is surging upwards after the financial troubles of 2008. Rents and property prices in certain areas of the Emirate have enjoyed a double-digit rise over the past 12 months and, again, newspapers print headlines that are reminiscent of the days prior to 2008, when the real estate business was the easiest way to make money.
For me, Emaar’s launch is indicative of all that needs fixing in terms of the Emirate’s real estate. While the product is of high quality and well-priced at launch, little thought goes into how the units are to be sold. Instead of first-time buyers being given a chance to buy, multiple villas and flats are snapped up by real estate investors who are looking to buy cheap and sell for a premium overnight. It’s a tragedy for those that want to get onto the property ladder, and does much to dent their confidence in Dubai’s real estate sector.
What have we learned from the real estate crash of 2008? Is it a case of let’s do it all again, or are we going to see reform to stamp out property flipping and multiple villa purchases on launch days? The question needs to be asked of Emaar and other property developers: what has been learned over the past five years to help first-time buyers and consumer buyers? There may not be an abundance of common sense in the country’s real estate sector, but I fail to see what good this weekend’s images will do for Dubai’s real estate market.
About the writer:
A British national with Arabic roots, Alex has spent ten years in the Gulf and has lived in Saudi Arabia, Bahrain, Lebanon, Jordan, Syria and the United Arab Emirates. Alex lost his heart to journalism years ago, but he has worked with a range of multinational companies in the technology, energy and financial sector to develop marketing and communications approach to the region. He’s currently based in Dubai, but can often be found at Dubai International Airport flying back home to Bahrain or some other (hopefully exotic) destination.
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