Real estate relief

Developers admit that Dubai property prices could fall 20% but 60% is unlikely…

Property prices in Dubai could fall about 20 percent on average, according to the chairman of the emirate's largest developer, Emaar Properties.

Mohamed Alabbar also said Emaar's financial position was strong but the firm had no intention to buy back shares, but it might consider delaying some projects if market conditions indicated a need to postpone putting new units for sale.

Asked about views that real estate prices could fall as much as 60 percent, Mohamed Alabbar said: "In my opinion a decline of 60 percent is illogical. There will be a variation in the percentage of decline based on the location and level of units."

He added: "Prices in some areas will fall 10 percent in others the decline would reach 30 percent, on average I expect the decline to reach 20 percent even if there were some units being sold cheaper because their owners are in dire need for cash."

Alabbar said earlier this month that demand for real estate in Dubai is likely to outweigh supply this year despite the fallout of the global financial crisis. Alabbar also heads a crisis committee set up by the Dubai government to respond to the global financial crisis, which brought to an end an economic boom in the Gulf Arab region.

 Property prices in the emirate fell 23 percent in the last quarter of 2008, HSBC said last week. Alabbar said Emaar has laid off 100 employees after the financial crisis but was not facing any financial problems. "I believe we are finished now with the layoffs and this might be the same for other companies," he said.

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