Dubai Developer Damac Says Sales Boosted By Foreign Buyers

Ziad El Chaar said the momentum in the property market was being driven by foreign buyers, both those living in Dubai and abroad.

Dubai developer DAMAC Properties posted strong property sales in the first quarter thanks to robust demand from foreign buyers, its managing director told Reuters on Monday.

Sales hit Dhs2.8 billion ($762 million) in the first three months, Ziad El Chaar said. He did not provide a comparative figure for the same period last year, but said sales in the first quarter of this year were higher than the fourth quarter of 2014 – when they reached $700 million, according to Reuters calculations based on the company’s results.

Chaar said the momentum in the property market was being driven by foreign buyers, both those living in Dubai and abroad. He said the emirate’s lack of taxes on inheritance, rental income and capital gains was attracting interest.

“Q4 is usually our strongest quarter, so to be able to do more in Q1 gives us a good boost for the rest of the year,” he said.

DAMAC is Dubai’s No.2 listed developer by market value. It has three main projects – the Akoya and Akoya Oxygen residential and retail complexes plus developments in the Downtown Dubai area near Burj Khalifa, the world’s tallest tower – which together account for four-fifths of its planned units.

The company has held sales events in 22 cities outside the UAE this year, mostly in Asia, with citizens of other Gulf countries, India, Pakistan and Britain the company’s biggest customers so far in 2015.

Dubai house prices fell 49 per cent from a 2008 peak to the market bottom in 2009, according to consultants Cluttons, following a supply glut and the emirate’s debt crisis.

Values have rebounded, although Cluttons estimates prices were about 18 percent below peak values as of January, and some consultants expect prices to weaken in 2015.

“Over the past year there have been a number of new projects launched on the periphery of Dubai which have naturally been presented at a lower price than more established and completed projects,” said Chaar, adding DAMAC had not cut its prices.

“These launches have had an impact on the overall average price in Dubai.”

He played down the impact of the euro’s fall versus the dollar, against which the dirham is pegged.

“Euro zone buyers were never major players in Dubai’s property market,” he said.

DAMAC will hand over 900 villas at Akoya in 2015, with the bulk of the remaining 1,300 to be handed over the following year and through to 2018.