Luxury real estate developer DAMAC Properties has slammed brokerage firms for publishing Dubai market reports forecasting a glut in supply.
Ziad El Chaar, managing director of the company, accused the consultancies of having some vested interest to bring out research reports with inaccurate data. He said that doing so amounted to “professional malpractice”, adding that it was hurting market sentiment – a key driver for investment opportunities in Dubai.
He said that, in most of the cases, the figures have been taken from one source or from listings on websites and then often presented as fact in the media.
El Chaar said that, while such predictions help companies gain exposure and perceived authority, they also have a detrimental effect on the generally positive sentiment in the market, in addition to the danger of turning people away from what remains a strong and well-regulated marketplace.
He questioned in particular the Q4 2014 reports that suggested that there will be 25,000 housing handovers in Dubai this year.
“We at DAMAC Properties announced to the market at the start of the year that we would handover between 2,000 and 2,500 units over the course of 2015. Of that number, around 1,500 would be in Dubai. We remain on target to achieve this figure,” he said.
“One of the other large developers in Dubai, Emaar Properties, has told the market it will hand over circa 800 units in Dubai this year. That’s almost 2,500 units from two developers that make up over 50 per cent of all the current inventory handovers in Dubai. So, it begs the question: where are the 25,000 total handovers in Dubai in 2015 which predicted within market research reports?”
He also said there was no significant drop in rental prices in key areas such as Dubai Marina, JLT and the Burj Area, contrary to finding of some market reports.
“Rents are now running at the highest ever recorded in many areas – this would usually be a sign that there is a requirement for more housing, not less, to soften the growth in rental yields,” says El Chaar.
Several market research firms had published reports saying Dubai has been witnessing a downward correction after it peaked in October 2014, with declines in selling prices and rents and an increase in supply.
International real estate consultancy JLL had forecast early this year that 25,000 homes were expected to be completed in 2015. No one at the consultancy responded to a mail asking for its reaction to the developer’s accusations.