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Property Uncertainty will be Over

DUBAI - There is no property crash as such, but it is the failure of the financial system and once restored, property uncertainty will be over, said an industry expert.

According to Sweet Homes Group Chief Executive Officer Fahad Sattar Dero, the global financial meltdown has had a detrimental impact on customer sentiment. It has impacted the stock market and drained liquidity from the system.

These circumstances have led to a wait-and-watch approach from end-users.

Consequently, it is now probably time for a reality check and is likely an opportunity for investors to go back to their drawing boards and wait for the right value to come back to the market.

Certainly the property market has gravely affected, says Dero.

“Property investment is never ever a loss-making proposition. What is needed is patience,” says the CEO.

As regards to scaling down of the workforce, Dero says, “There will be hardly one per cent cut of workforce in sales department. Contrary to the fact, we are ourselves recruiting operation staff.”

Industry experts say, “The lower demand for off-plan property will help stabilise property prices and ultimately encourage more end-users to enter the market.

“Many of the market players are now having second thoughts and putting off their investments, prompting the real estate market will slow down for some time.”

On the other hand, when Khaleej Times contacted Nakheel — the UAE’s biggest property developer — regarding the monetary benefits the company will achieve following the 15 per cent job cut, a company spokesperson said, “Nakheel is a privately held company and does not reveal financial information. While details of the redundancy package are confidential and are privileged company-employee matters, the well-being of our employees is of prime importance to us. Therefore, we have taken into consideration social, financial, and professional welfare in providing redundancy packages.”

Nakheel, which is developing three iconic palm shaped islands on Sunday announced the layoff of 500 employees or 15 per cent of its 3,300 staff.

At the same time, it also announced that it is delaying a number of projects including the one it partnered with US realty tycoon Donald Trump.

One of the Gulf’s fastest growing real estate developers, Azizi Investments, recently announced that it was “business as usual” on its projects at Palm Jebel Ali.

Developers in Dubai have cut jobs and reviewed projects as they brace for a slowdown in demand for properties across the region and as access to credit dries up.

According to statistics made available by Building and Construction Network, Nakheel’s portfolio includes a total of 571 projects with more than 249 projects still under construction.

abdulbasit@khaleejtimes.com