Dubai’s government is “closely monitoring” property prices and rents to avoid a new bubble forming in the wake of yesterday’s Expo 2020 win, the chairman of developer Emaar Properties told Al Arabiya.net.
Many have raised concerns about unsustainable property price rises, which some analysts believe could be pushed higher by the decision to let Dubai host the World Expo.
But Mohamed Alabbar, Chairman of Emaar Properties, played down fears of a new property bubble.
“The government will not allow unjustifiable increases in rents or property prices,” he told Al Arabiya.
Experts recorded growth of over 34 percent in property prices within the city of Dubai in 2013, which some fear is unsustainable and could lead to a crash similar to the one that hit Dubai’s economy in 2008.
According to industry experts, property rentals are on the rise as well.
“Property rentals have increased as well, not at the same growth rate [as purchase prices], but they’ve seen a 20-25 percent increase and that’s substantial,” Saadallah al-Abed, a manager at Colliers International, told Al Arabiya News.
But Emaar’s Alabbar said the Dubai government “is closely monitoring” such moves. “There is government control, and there is economic growth across all sectors,” he told the Al Arabiya News Channel during an exclusive interview.
Stressing on the government’s role in controlling the situation, Alabbar said: “The government has been monitoring since before the economic boom, during the boom, and it continues to monitor… and don’t forget there are six years to go until the Expo 2020, so I don’t think we will have masses coming into the city tomorrow morning.”
Following the celebrations of the Expo 2020 announcement, the chairman of Emaar Properties said the responsibility is substantial as the emirate goes under the spotlight.
“Better and more serious work must be done now, because the trust is big, the hope is big, and today we represent the Arab world overall… the burden is heavy but thankfully we are capable,” Alabbar said.
“This [win] means business, investments, tourism and growth… the UAE maintains this [success], but it also poses responsibility… as the world trusted [us],” he said.
Dubai is forecasted to receive around 25 million visitors during the 6-month fair, according data from travel website the Moodie Report.
According to Alabbar, the UAE is capable of growing with the demand.
“The UAE and Dubai specifically has enjoyed over 10 percent growth in the tourism sector for the past 20 years. So the infrastructure has been continuously growing [in parallel],” he said.
The economy is seeing growth “with or without Expo 2020”, Alabbar added.
“What will be built from now until 2020… I assure you the infrastructure will be constructed for 2020 and [sustainable] after 2020.”
Dubai was named host city of the World Expo 2020 yesterday evening, having fought off competition from Turkey, Russia and Brazil.
“For the UAE, which is a little over 40 years old, to compete and win against countries that are hundreds of years old, this is a dream come true,” said Alabbar.SHOW MORE