(Bloomberg) —

While the coronavirus is wreaking havoc around the world, it could give Dubai’s long-slumping property market a much-needed break from new projects, a top developer said.“If there is a silver lining to this crisis, it’s that now everybody is going to halt new projects at least for a while,” Hussain Sajwani, chairman of Damac Properties PJSC, said in an interview. “The reality on the ground is dictating the situation.”

Dubai’s developers have continued to build homes and start big new projects despite six years of falling prices and unmistakable signs of oversupply in the market. Now the double hit of the virus crisis and a partly related plunge in oil prices means buyers will have considerably less cash to pay for new homes.

Developers have no choice but to halt projects “because their receivables are going to be huge” if they continue, Sajwani said.

The Damac chairman has long criticized his competitors, some of them state-owned, for being unwilling to band together and set limits on new developments. In October, he warned that Dubai could face a disaster if it fails to halt all new home construction for one or two years. Some relief has come from state-backed companies since Dubai’s ruler started a committee to study the oversupply issue, he said.

Damac’s stock has lost 48% of its value in the past 12 months. Emaar Properties PJSC, which built the world’s tallest tower, saw its value sink 43% in the same period. Dubai owns about 29% of Emaar.

“I don’t think there will be new launches in 2020 or most of 2021,” Sajwani said. The market may start inching upward by October 2021, when Dubai is set to open the World Expo originally scheduled for this year, he said.

Dubai Faces a ‘Disaster’ From Overbuilding, Top Developer Says

Damac is focusing on selling its existing inventories and is offering discounts to customers willing to pay ahead of schedule for homes purchased before the pandemic hit. The company also reduced prices of properties in developments by as much as 10% to entice buyers, the chairman said.

“We are seeing a lot of customers looking for bargains” even amid the lockdown, he said. “Sometimes the offered price is ridiculous, but often it’s something we can negotiate.”

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