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Affordability issues slow down Emaar sales

Burj Khalifa

Burj Khalifa, the world’s tallest tower owned by Emaar

| TAP Special| A slowdown in the sales of Emaar Properties in the previous quarter may be attributed to Dubai properties becoming unaffordable to many potential buyers due to a general price escalation in the property market.

Emaar sold properties in Dubai worth 3.12 billion dirhams during the quarter, down from 3.29 billion in the same quarter last year. Obviously, the slowdown had an impact on revenue, which dropped to  2.81 billion dirhams from 3.11 billion in the same quarter for the previous year.

Speculative buying and new project announcements have pushed up prices, making them unaffordable to many. This has forced a market slowdown in terms of sales. Property consultant JLL had referred to such a slowdown in its latest report.

The leading Dubai developer, however, reported a 28.6 percent rise in second-quarter net profit, marginally beating forecasts.

The builder of the world’s tallest tower Burj Khalifa made a net profit of 868 million dirhams ($236.3 million) in the three months ending June 30, compared with 675 million a year before, it said in a statement to Dubai’s bourse. The outcome beat an average forecast of 839.8 million dirhams for the period.

But revenue from its malls, retail and hospitality business grew by 12 percent. Emaar Malls Group, a division of Emaar Properties, will look to sell a quarter of its shares to the public on the Dubai stock market when it lists later this year.