DAMAC Properties predicts weak quarters for Dubai real estate before rebound

Dubai’s real estate market faces another few quarters of “soft market conditions” before starting to rebound from late 2019, DAMAC Properties’ chief financial officer said. (Shutterstock)
Updated 02 October 2018
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DAMAC Properties predicts weak quarters for Dubai real estate before rebound

DUBAI: Dubai’s real estate market faces another few quarters of “soft market conditions” before starting to rebound from late 2019, DAMAC Properties’ chief financial officer said.
Residential prices in Dubai have fallen more than 15 percent since 2014 and this year DAMAC registered its worst quarter of booked sales since going public five years ago.
“There is a mood of positivity that we are closer to the end of the weak cycle ... Fundamentally prices cannot go down much further,” DAMAC CFO Adil Taqi told Reuters on Tuesday at the annual Cityscape property exhibition in Dubai.
Rising oil prices, which have risen to four-year highs in 2018, and an increase in government spending could have a positive impact on the property market next year, Taqi said.
Dubai has little reliance on oil revenue, but it is a driver of regional wealth and economic growth and oil prices.
And this week the UAE announced its biggest ever federal budget, which while a fraction of overall government expenditure is a sign that the government aims to spend more actively to boost economic growth.
“I think (at the) end of 2019 and (in) 2020 we will begin to see winds of change,” Taqi said.
DAMAC has told regulators that it believes more capital being available through mortgages would be beneficial to the real estate industry, Taqi said.
Reuters reported on Sept. 24 that the UAE’s banking group was considering suggesting the Central Bank relax mortgage lending rules to stimulate the real estate market.
Taqi said the “the trend of the soft market” continued in the third quarter, but declined to discuss further ahead of the public disclosure.
DAMAC’s profit fell by around 46 percent in the April-June period, when it booked its worst quarter of sales.


‘Substantial progress’ made on major China trade deal that excludes US

Updated 14 November 2018
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‘Substantial progress’ made on major China trade deal that excludes US

SINGAPORE: Substantial progress has been made on hammering out a China-backed trade deal, Singapore’s leader said Wednesday, driving ahead the world’s largest commercial pact which the United States is excluded from.
World leaders gathered in the tropical city state this week for a summit where a massive Beijing-backed agreement covering half the world’s population has dominated discussions.
Diplomats have been trying to nail down details as Beijing entices its neighbors to join a commercial alliance seen as an antidote to President Donald Trump’s “America First” protectionist trade policy.
The US has imposed tariffs on roughly half of what it imports from China, prompting Beijing to retaliate with its own levies.
Beijing’s leaders have recast themselves as the defenders of global commerce — with the United States under Trump relegated to the sidelines.
China, Japan and India are among 16 Asia-Pacific countries negotiating the Regional Comprehensive Economic Partnership (RCEP).
“Substantial progress has been made this year to advance the RCEP negotiations,” Singaporean Prime Minister Lee Hsien Loong said Wednesday evening, adding talks were now “at the final stage.”
“With the strong momentum generated this year, I am pleased to note that the RCEP negotiations are poised for conclusion in 2019,” he added.
But he cautioned any further delays could risk “losing credibility” for a deal — which has already taken six years to negotiate.
This week’s meetings are the biggest in a series of annual gatherings organized by regional bloc the Association of Southeast Nations (ASEAN), and are attended by 20 leaders.
RCEP was given extra impetus after US President Donald Trump pulled the US out of the rival Trans-Pacific Partnership (TPP) in early 2017.
That deal was spearheaded by his predecessor Barack Obama and aimed to bind fast-growing Asian powers into an American-backed order to counter China.
The TPP is still alive even without Washington — and will come into effect in December — but RCEP, if realized, will be the world’s biggest trade deal.
However, the Beijing-backed pact is much less ambitious than the TPP in areas such as employment and environmental protection.
Beijing had hoped to have the meat of the deal done by the end of this year, but the timetable has now slipped to 2019.
However, this has not stopped Chinese leaders from basking in the progress already made.
During a meeting with Southeast Asia leaders, Chinese Premier Li Keqiang said he was hopeful talks would “break through the ceiling” and take regional trade “to new heights.”
Trump is not at the Singapore summit, nor will he attend a subsequent gathering of world leaders in Papua New Guinea at the end of the week, having sent Vice President Mike Pence instead.
National Security Adviser John Bolton, however, told reporters in Singapore that the president’s no-show should not be seen as a lack of commitment toward the region.
He blamed a “schedule crunch” after a particularly frenetic few weeks that included the midterm elections, attending the World War I armistice commemorations in France and preparing for the G20 in Argentina later this month.
There are still major sticking points in RCEP talks — with regional rival India particularly nervous about giving Chinese companies greater access to its markets, and wealthier nations wanting to see more progress on labor reforms.
Disagreements on intellectual property rights, goods tariffs and financial services are also on a long list of issues that still need to be concluded.
Also, the spectre of possible leadership changes with several general elections scheduled early next year — India, Thailand and Indonesia — have also complicated the timeline for a deal.
Aaron Connelly, an expert on Southeast Asian politics at the International Institute for Strategic Studies, said the fact that RCEP negotiations were not concluded at this year’s ASEAN could indicate China has some way to go to convince neighbors to sign up.
“It’s interesting that when Beijing is at its most vulnerable on trade, with US tariffs biting, they weren’t willing to concede enough to their neighbors in terms of market access to get a deal done,” he told AFP.
At the same time, trade ministers across Asia Pacific have sounded a largely positive tone this week, saying they expect the pact to be agreed sooner rather than later.
“The future lies in RCEP,” Indian trade minister Suresh Prabhu told reporters earlier in the week.