Dubai property magnate warns greed will lead to ‘disaster’ for Dubai’s housing market
Dubai property magnate Hussain Sajwani has repeated calls for an immediate halt to construction, warning the city faces “disaster” if oversupply continues. Dubai’s real estate market, a crucial component of its economy, is feeling the pain. Housing oversupply has forced prices down at least a quarter since 2014, and a surplus of vacant apartments sit in darkness among the bright lights of its glitzy skyline.
“It’s the greediness of the developers,” Sajwani said, pointing the finger at his competitors. “You reach a time in the curve where you need to slow down,” Sajwani said, suggesting that builders need to halt new residential projects for at least a year in order to start a recovery. “If we stopped today, we’ll be OK,” he said. “I think there is a demand for at least 15,000-25,000 units a year, If we oversupply more than that, we’ve got a problem,” he added.
Dubai’s economy grew at just 1.94% last year, its slowest pace since the dark days of the city’s near economic collapse in 2009. Ten years ago, a debt crisis sparked by a property crunch forced Dubai to seek a $20 billion dollar bailout from its more conservative and moneyed neighbor, Abu Dhabi.
The situation is unlikely to repeat, but the state of the property market has raised concerns in some circles about a possible flow on effect into the countries banks. Lenders in the emirate extended loans worth $66 billion to Dubai’s real estate sector last year, according to the UAE Banks Federation.