The chairman of one of Dubai’s biggest developers has said that the dip in the city’s property prices has been positive.
The Financial Times reported that Ali Rashid Lootah said the downturn was a “good correction – we don’t want Dubai to be too expensive” during an industry conference in Cannes.
Lootah called the financial crisis “a good lesson learnt,” adding that the property market in Dubai was “very stable – demand is less but it has stabilised”.
The falling oil price, the dirham’s peg to the dollar and regional uncertainty have all contributed to an estimated 10 percent drop in property values in 2015, with some experts suggesting that further softening can be expected this year.
Lootah also said that Nakheel is mulling new developments in three Asian countries, revealing that the company is in talks over a mixed-used development with a Vietnamese partner in Ho Chi Minh City. It has also been approached by potential partners in China and Pakistan.
“We are looking at opportunities to diversify,” Lootah said during the event in Cannes, where Nakheel is hoping to lure investors with $1bn worth of new projects.
Earlier this month, the company signed a deal with a Saudi developer to help develop mixed-used projects in and around Riyadh.
The firm has 3,000 residential units in the pipeline, and is aiming to build 10 new hotels in Dubai by 2020. Its latest reclaimed land project, Deira Islands, will add 40km to Dubai’s coastline.
Nakheel was one of the developers worst hit by Dubai’s real estate crash at the turn of the decade. A drawn-out process led to it restructure debt worth nearly $16 billion.
The property sector has since rebounded and Nakheel paid off its pre-crisis bank debt four years ahead of schedule. Property prices in Dubai were among the fastest-rising in the world in the 18 months to June 2014, although prices have softened since then.