Emaar Properties, Dubai’s largest real estate developer, has banned estate agents from reselling homes before completion to bring more stability to a market still recovering from a 2009 crash.
A strong rebound in the Dubai property market over the last year has resulted in several investors “flipping” their assets – buying and selling unbuilt properties in quick succession to make speculative profits.
Emaar said last week it had observed a number of estate agents buying property for onward sales to end-users.
“Therefore, Emaar has asked the real estate agents to not resell off-plan properties until the unit is completed and handed over,” the company said in a statement.
“This is also aimed at providing more stability to the real estate market and to minimise the adverse impact due to heavy speculative practices,” it added.
The ban does not apply to individual investors, who can still buy and sell homes before they are completed.
After slumping by more than 50 per cent as a bubble burst in 2009-2010, pushing Dubai close to a debt default, residential real estate prices are recovering, rising about 20 per cent this year thanks partly to an influx of foreign money.
The International Monetary Fund warned in July that the authorities might need to intervene to prevent another real estate market bubble from forming.
Emaar’s chairman, Mohamed Alabbar, warned earlier this year that the practice of buying speculatively for quick resale needed to be controlled.