Dubai property is set to take a positive turn next year during the Expo 2020 as market is unlikely to see new major launches in 2020 and 2021 that will help bridge demand and supply gap to balance the market, according to a top official.
"I don't think we are going to see more (project) launches in most of 2020 and 2021. Then in October 2021 when Expo starts, we could see the market is going to change in a positive way," said Hussain Sajwani, chairman of Damac Properties.
"It doesn't matter how much supply you have, if you have more demand, you can do better. 2020 is going to be a difficult year for everybody as Covid-19 is not going to disappear in a month or two. The government is working on a lot of plans for Expo 2020 in terms of tourism and creating demand. Since supply is, anyway, going to be halted, so let us push the demand," Sajwani said during an interview with Bloomberg.
Sajwani said his competitors have halted or cancelled some projects so it is highly unlikely that they would launch new projects again in the near future. Despite a very few new launches, the latest data showed that the spillover effect from 2019 has resulted in higher completion of new units during January-April 2020 period as compared to same period last year.
According to Property Finder, 20,639 units were completed in the first four months of 2020 as compared to 15,060 in the same period last year.
Dubai's largest private developer itself launched just two small projects in the last two and a half years.
"The most important thing is that we didn't give payment plan at five per cent upfront for five-year exemption. We did the same thing in 2007 and it saved us. Our cash flow is sufficient and we have taken measures to weather the crisis," Sajwani said.
The Damac chairman reiterated that it is a great opportunity to invest in Dubai's property market.
"The products are selling in the secondary market below the replacement cost. A lot of customers are looking for bargains. We don't have a lot of Chinese customers but there is a money in third world countries and they are coming and looking for bargains."
Not cancelling projects
Sajwani stressed that the company will survive Coronavirus crisis. "We are not under pressure and not cancelling projects. Damac has enough money in Escrow account to build its entire projects without delay. We are focusing on cash and collections. And we are willing to give discounts and incentive for people who are willing to pay on time or ahead of time. For the new sales, we have reduced the prices 5-10 per cent in certain areas but will not reduce more than that," he said.
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