DUBAI - The chairman of DAMAC Properties said on Thursday property developers should refrain from launching any new residential projects in Dubai for at least a year in order to kickstart a recovery in a market where prices are down sharply.
Dubai has faced a slowing real estate market for most of the decade, barring a brief pickup more than five years ago. Housing oversupply has driven prices down at least a quarter since 2014.
The slowdown has squeezed the earnings of the emirate's top developers, including DAMAC, whose second-quarter profit fell 87% and whose share price has lost nearly 40% so far this year.
"Let the market stabilise," DAMAC chairman Hussain Sajwani told Reuters at the company's office in Dubai.
DAMAC has launched one project so far this year, he said, compared to two in 2018 and the roughly five or six it had launched annually in prior years.
"We're going very conservative," he said.
Sajwani, who founded the company in 2002, said 2019 had been tougher than the previous year but was manageable and that this year's sales would be like those seen in 2018.
The DAMAC chairman said a large, rival company had been "dumping in the market" with new launches over the past 18 months.
"It's bad for the country, for the market, and it's going to be bad for them."
Sajwani declined to identify the company. Emaar Properties is the biggest listed developer in Dubai.
He said the market could start to recover in two years' time if there were no new launches over the same period but warned if no action were taken, the situation could worsen.
"Everybody will be a loser - the customer, the developer and the city," he said.
However, he said projects that had been launched should go ahead.
Sajwani said he had shared his opinion with Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum, who in September announced the government was setting up a real-estate planning commission to regulate the sector.
Property is a significant contributor to the economy of Dubai, which has no major oil or gas resources.
(Reporting by Alexander Cornwell; Editing by Dale Hudson) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: email@example.com))