UAE real estate market to 'bounce back'

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REAL ESTATE: UAE market set to bounce back. (Getty Images)

Memon Investments, the Dubai-based property developer, expects the UAE real estate market to bounce back within the next eight to twelve months.

The firm bases its forecast on recent industry findings showing a 30 percent fall in construction costs per square foot within the Emirates, since the onset of the economic crisis. 

Industry experts point to the massive drop in the price of steel, as well as that of other materials including aluminium, wood, glass and diesel. The declining cost of labour and supervision due to recent redundancies and terminations has also contributed to the dip in construction expenditures.

''In lieu of the massive correction in the prices of basic construction materials, we are now focusing our strategy on the implications of this development, particularly with regards to the construction and delivery of our launched projects,'' said Ahmed Shaikhani, Managing Director Memon Investments.
 
The company currently has a portfolio of projects valued at close to 1.34 billion dirhams, including the high profile residential 'Champions Towers' series and the 'Cambridge Business Centre'.

The developer has announced it has identified major master developments in Dubai, including Jumeirah Village South, MIZIN and Downtown Jebel Ali as locations for its new projects, which will include luxury residential, commercial and mixed-use developments.

''The current adjustments we are seeing in the price of construction indicate the industry is becoming healthier, which spells more opportunity in the long-term for those who can withstand these truly challenging times that the market is currently facing.

''It is our goal that by the time the real estate market regains its former vigour; we will be among the few developers to have endured the challenges and remained stable.

''We plan to accomplish this by working hand in hand with our construction partners as we determine the best course of action to be taken during this unique period in the history of real estate,'' concluded Shaikhani.

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READERS' COMMENTS

Analysis Please
Posted by KS, DXB, UAE on Saturday 14 March 2009 at 15:37 UAE time


I would recommend that the media publish such articles with a good analysis from previous data (if any), on the bouncing back of the realty sector, in order to allow readers to get a clear picture in the market. I have seen properties which were advertised for 3.2M come down to 1.1M within a span of 5 months, which is a transparent indicator of an immature marketplace, which was hyped beyond anyones expectations. As with any market, there are winners and losers, and a period which goes through an anlaysis and correction phase. Markets and people mature over time, there an old saying "Once bitten Twice shy", having said this, people will be more cautious, secondly the financial elements, like the banks, need to open up, and lend based on realistic value propositions, as today they are also the losers, as anyone defaulting on a property loan taken on the example above, leaves the bank with a deficit of 2M, as banks cannot dispose the said property effectively. Finally the goverment should be precise on issuing federal laws, which would govern and protect the investment of the people. Bottom line is go with the policies, facts and figures in place. Thanks

Bouncing back...
Posted by Ronald, Dubai, Dubai on Wednesday 11 March 2009 at 17:59 UAE time


Do you think its a ball game, where it will bounce back with the same strength, its not possible. It will take long time.......you'll (Real Estate) had spoiled the market and this is the reason it has fired back. You'll had enjoyed yourselves beyond limits, leaving the buyers high and dry and now its your chance, dont give wrong pictures that it will bounce back. Be humble and leave the pride behind, because if you dont then there wont be anyone buying your property except the birds making nest.
Good Luck

Dubai real estate market to 'bounce back?'
Posted by Bede, Dubai, UAE on Tuesday 10 March 2009 at 16:18 UAE time

There is a huge oversupply of the wrong type of properties, all high end. Expatriates are all but excuded from the current market due to lack of job security, no right of residency if unemployment strikes and, now, lack of available mortgage financing. Investors are seeing rents plummet due to the falling population, so they won't be investing more. The idea of a second home is a non-starter without the right to come and go without visa restrictions. The speculators are gone and won't be coming back. Can someone tell me who is going to buy, or rent, the properties that are currently available? Not to mention the thousands more that will become available shortly.....So what has the price of construction materials got to do with any of this? Absolutely nothing!!! It might help developers maintain some level of profit while they finish off existing projects but that's all. The solution to the current problem? Give all expats (with, say, more than 5 years in the country) a 10 year right of residency and give government guarantees to lending institutions to back up mortgages up to 85%. This will stimulate domestic demand from end-users which has been almost non-existant in the past two or three years. Give automatic, but renewable, 10 year right of residency, extended to the immediate family but cancelled upon any criminal conviction in Dubai, to anyone from abroad who buys with intention to use their property.

UAE real estate market to 'bounce back'
Posted by ajoy, jalgaon, india on Tuesday 10 March 2009 at 12:41 UAE time


I fully agree with Ali . Every body is scared now. Earlier people invested that they would get residence visa which was later withdrawn by the authorities. later they invested that they would have the job here for next 15 years...so why to rent ? Buy the property even no visa was there. Now niether visa nor the jobs... why and who will take the property. Adding insult to injury.. Bank policies are other hard hitting fact.So to get rid of these and bring back the market..1st bring irrevocable laws about property keeping in view global buyers,2nd- make visa status clear and flexible in favour of buyer.Some banks are still giving loans so at least there will be some boost to the market by applying these measures. Once construction starts..cycle and system will work automatically

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