It’s a buyer’s market in Dubai, where mansions on coastal developments, such as Palm Jebel Ali and the Palm Jumeirah, are selling at up to 40% below their peak.  But that’s lead to government concern, and now, intervention.

From Sunday’s Financial Times:

The Dubai government on Sunday formed a high level committee to tackle the impact of the widening financial crisis on the emirate’s once booming property market.

Amid signs of a deepening real estate correction, Mohammed Alabbar, chairman of the region’s biggest developer, Emaar Properties, said the committee was exploring various options to restore confidence in the market. Real estate agents report a slump in sales activity and price reductions in some developments of as much as 40 per cent.

Emaar Properties, the main driver behind the property market boom in Dubai since foreigners were allowed to buy property in 2002, said it was studying more flexibility on mortgage payments to ease terms for some buyers.

Note that the emirate’s finance ministry is also pumping Dh70bn into the financial system in order to shore up banks’ balance sheets and allow them to continue lending. It is expected that the future supply of real estate will be stemmed in order to “ensure that demand remains robust”. Other confidence-boosting measures, the piece notes, include “easing financial repayment terms for property buyers and encouraging consolidation in the real estate sector”.

Emaar Properties is a gem among frontier companies. It has a strong portfolio of projects in 36 markets globally, with a development value for the international projects alone over AED 367 billion (AED 100 billion). Past projects include Burj Dubai, the world’s tallest building; The Dubai Mall, one of the world’s largest shopping and entertainment destinations; and King Abdullah Economic City in Saudi Arabia, the single largest private sector project in the Middle East region. It has also unveiled integrated communities in Egypt, Morocco, Libya, Turkey, Saudi Arabia, Syria, Jordan, Indonesia, Pakistan, India, Canada and the US. The company also won six awards in all in last month’s Euromoney Liquid Real Estate Awards, which honor the world’s leading developers for their commitment to industry best practices in overall project management and strong investor relations and corporate governance practices, as reflected in the company’s financial fundamentals.

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