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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
An opinion piece by Alex Malouf
Do you know the saying ‘no news is bad news’? I’m sure the people at Emaar do, and I’m sure that they will be judging the coverage of their last property sale over the past couple of days. There are only a few people who will not have been aware of Emaar’s latest launch of the Mira development, comprising villas that cost as little as a one million dirhams or less.
The project garnered wall-to-wall media coverage locally and globally. If you’ve been hiding in a cave or under a rock for the past couple of days, watch this clip of Emaar’s Mira villas sale and see for yourself.
From an organizational point of view, the sale on Saturday was a disaster. Several days beforehand the warning signs were there for all to see (and read about). For at least two days before the opening of Emaar’s sales office at 7am on Saturday morning several hundred people were already waiting, camping even, to purchase a villa in Emaar’s Reem residential community. Most of those people, it seems, were construction workers who were hired by real estate investors to ensure a place at the head of the queue for the 200 or so villas which would be released.
As D-day approached the scene was to become even more chaotic, with ‘scuffles’ as queue-jumpers took their chance to steal into the line. Local paper 7Days described how police had to be brought on-site to control the chaos; three police buses, six police SUVs and an ambulance were parked up outside Emaar’s office to restore order after Emaar’s own security failed to.
In scenes that have been described as a cattle market, buyers were told by Emaar that instead of being sold on Saturday morning as advertised, townhouses would instead be sold ‘tomorrow’. As is often the case here, tomorrow doesn’t mean tomorrow, rather a couple of hours after. Unfortunately, many of those people who wanted to buy for themselves took these announcements at face value and left.
Judging by the ensuring coverage today, most of those homes have been sold to real estate agencies that are already looking to flip them for upwards of 30 per cent premium online (prices per square foot at Emaar’s nearby development Arabian Ranches are double that of the Mira villas, which went on sale Saturday).
But while Emaar savours a PR coup, what damage has been done to its reputation? Does the company want to be viewed as incompetent if they failed to foresee the demand and ensuing events, or unscrupulous calculating if they did know what was likely to unfold on Saturday morning?
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