Dubai property prices to go down substantially - Prince Alwaleed
Saudi Arabia’s Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud has warned that Dubai’s property market faces substantial further falls, and will take several years to reach its bottom.
The Kingdom Holding chairman warned that over supply remained a huge problem in the emirate, which has seen prices crash more than 70 per cent in some parts, the chairman told Arabian Business.
“There are new buildings coming out, I think we have not seen the bottom in real estate [in Dubai], there are years to come. I don’t believe you are there [the bottom] yet because more supply is coming,” he added.
“The price has to go down substantially for demand to reach equilibrium with supply. Many land owners are holding their old prices. Someone has to give in. The price has to go down, substantially. It's supply and demand - it’s a no brainer.”
The prince said he believed the global economy remained in a recession.
“The recession is technically over, but in reality it’s not over. It’s like someone getting out of the ICU, he’s still breathing but he’s still in deep trouble. We are not out of the trouble, but not in deep trouble. When you have unemployment in Europe at eight percent, in the US nine percent, you can’t say things are fine," he added.
His comments come a week after Chris O’Donnell, the CEO of state-backed Dubai developer Nakheel, said that the oversupply of residential properties in the emirate could take up to five years to clear.
“The general oversupply will be cleared in three to five years and will be driven by the economic growth. Things can happen to cause oversupply to be removed fairly quickly. Our view is based on what we are seeing in the market,” O’Donnell said.