City Space Global, one of the largest real estate conferences with the new reality, has seen the absence of major construction companies in the emirate of Dubai, such as Emaar, the world’s tallest tower, and DAMAC, which oversaw the establishment of Donald Trump’s golf resorts.
It was attended by a company like Palm, which built artificial islands in the form of palm leaves but did not submit new projects.
In a sign of the desperate state of Dubai’s real estate market, authorities in the emirate have warned brokers and contractors against chasing potential buyers in the conference halls or parking lots, a sign of the huge competition among them to attract new buyers to their stagnant market.
Chris Speller, Managing Director, CitySpace said: “We understand the budgetary concerns faced by contractors in the current real estate market environment in the UAE and internationally.
“While the current situation is not limited to Dubai, we applaud the government’s incentives to strengthen the local sector and boost confidence in the real estate market.”
The lukewarm sentiment at this year’s conference is a reflection of the real estate market and house prices have fallen by a quarter since 2014 due to large supply and slow economic growth.
“We hope that we are at the end of the session regardless of whether we will have a hard time accepting the situation in the coming years,” commented Stephen Morgan, Plc’s Middle East travel manager.
With the local market fading, many brokers are trying to find new ways. Alaa Behbehani, director of a real estate company in Kuwait, said he attended the event to look for real estate opportunities in Turkey and Georgia.
He said many of his customers had sold their properties at reduced prices to ease their losses, adding that geopolitical tensions were hurting the market. “If you are an investor country, you should stay out of politics,” he said. Sabha Plc relies on a Chinese real estate company to open an office in Shanghai.
Her manager says the approach has had a positive impact. Most of the off-plan properties have been sold to Chinese buyers.
The occasion was an opportunity to showcase luxury homes, but it became suitable for those looking for low prices. “Real estate can be bought here more than we have,” says betting Jennifer Clark, who works for Glory International Real Estate, which came from Florida.
Asked about the advantages of buying a 14-hour flight, Anthony Canzers of US company ReMax All Bros. joked: “Because it’s weird, isn’t Dubai like Monaco.”
A few days ago, Reuters news agency published the forecasts of international experts in the real estate market Dubai house prices have fallen sharply in the next two years and next, and said that the slowdown of the economy and the increase in supply of housing units foreshadows further decline to expectations already weak.
Dubai has faced a sharp slowdown in the real estate market for most of the decade, with the exception of a brief recovery more than five years ago.
The downward trend in Dubai’s housing market activity, which is a key factor in its GDP, is expected to continue.
A Reuters poll of market analysts at 11 investment firms and a research institute between August 14 and September 3 showed house prices in Dubai would fall 10% this year and 5% next year and are expected to fall 3.3% in 2021.
These views are also driven by concern that global growth has been hit by the trade war between Washington and Beijing, and is consistent with similar polls conducted by Reuters that showed activity in the housing market in the United States, Britain, Canada and India is struggling.
Dubai’s economy grew only 1.94% last year, the slowest since the 2009 financial crisis, amid a slowdown in the property market.
Dubai’s economy, which relies on tourism and global corporate services, is now expected to grow 3.8 percent in 2020 and 2.8 percent in 2021, the government said. But this will depend mostly on external factors.
A recently announced government stimulus package could trigger a recovery in the real estate market, but the excess supply of housing units is likely to hurt prices and demand.
“There is currently a glut on the market, which is the situation over the last two years,” said Haider Tuema, head of real estate research at Falostrat.
“There have been record numbers of sales projects on the map since 2017 with very successful sales campaigns that promise very attractive post-delivery payment plans for investors over a number of years, which has impacted the capital values of properties already in Dubai.”