Property Prices Could Fall 20% - Al Abbar

Property prices in Dubai could fall about 20 per cent on average, the chairman of the emirate's largest developer, Emaar Properties, said in remarks published on on Monday. He did not give a timeframe. Mohammad Al Abbar 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 per cent, Al Abbar told Al Khaleej newspaper: "In my opinion a decline of 60 per cent is illogical. There will be a variation in the percentage of decline based on the location and level of units. Prices in some areas will fall 10 per cent in others the decline would reach 30 per cent, on average I expect the decline to reach 20 per cent even if there were some units being sold cheaper because their owners are in dire need for cash. Al Abbar 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 downturn. Al Abbar 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 per cent in the last quarter of 2008, HSBC said last week. Al Abbar said Emaar has laid off 100 employees after the financial crisis but was not in any financial trouble. I believe we are finished now with the layoffs and this might be the same for other companies," he said. We do not have financial problems, the financial policy that we have followed over the past years in preserving liquidity despite the pressure we faced at general assemblies from shareholders calling for higher dividend helped the company enjoy a good financial position now.