Dubai's RERA says 202 real estate projects cancelled

Tuesday, 14 December 2010 5:31 PM

RERA CEO: Marwan Bin Ghalaita, chief executive officer the Real Estate Regulatory Agency (ITP Images)

Dubai has cancelled 202 property projects and won’t allow developers to start new ones without funding them in advance as it works to control supply, the head of the Emirate’s real estate regulator said.

“We are putting in a proper plan to watch over supply,” Marwan Bin Ghalaita, chief executive officer the Real Estate Regulatory Agency, said in an interview Tuesday. Developers requested 115 of the cancellations, which took place since late 2009, he said.

About 33,000 new housing units will be added to Dubai’s market by this year, exacerbating a vacancy rate of around 40 percent, Colliers International estimated. Property prices have fallen by almost 60 percent after banks curtailed lending and speculators left the market.

The regulator, known as RERA, has developed new criteria to evaluate developments that were under way when the financial crisis hit, Bin Ghalaita said. It’s cancelling projects where little or no construction has taken place or where buildings are far from city infrastructure.

Projects in which the majority of buyers were speculators and have ceased payments or those owned by developers who can’t show they are capable of finishing the work are also being stopped or delayed, the RERA chief said. He wouldn’t name specific projects.

Dubai’s property market, where home prices surged 79 percent from 2007 to mid-2008, is “back where it should be and is currently attractive to end-user investors,” he said. Potential buyers can expect yields of as much as 12 percent a year by leasing out housing units after the decline in prices, the he said.

Many investors continue to pay on properties they bought before the crisis because they believe they are making a good long-term investment, he said.

“There are some investors or speculators who made bad decisions and now they want to back up,” Bin Ghalaita said. “But the majority of investors, as long as their project is progressing, are paying and need their properties.”

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Read All 44 Comments

Posted by: Dan Monday, 14 May 2012 4:24 PM[UAE] - UK

I am another investor who has shed AED 230,000 on a development called Arabian Tower in JVS. Like most of you, the money has been stuck for about 5 years now.

So here I am to join the morners forumn with many questions and no answers.

Now there are various questions to answer:

1. I can understand that market conditions remain poor but why there is no communication from either Developer or RERA? There is a legal obligaton there to keep the investors up to date. I have not received any communication from anyone for last 3 years.

2. Why cancelled projects are not disclosed?

3. What is the fate of investor if a project gets cancelled?

4. How to contact RERA? What is the number? I never managed to speak to them after failing to get a response for several written complaints.

5. What was the Escrow Account rule? And what is it now? Mine had an Escrow bit its all a joke. Even RERA itself is a joke.

6. How can I get in touch with some other investors of the same project Arabian tower?

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Posted by: Mike DeLonghi Wednesday, 9 May 2012 1:38 PM[UAE] - Saudi Arabia

Why does RERA not publish the list over cancelled projects? What rights does the investor have in case of cancellation? I am not impressed by the statements made, 4 years after the plan you proudly announce a 'proper plan' to control supply. A little late to the party I should say......

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Posted by: Paolo C Tuesday, 8 May 2012 7:11 PM[UAE] - Italy

Sure! Where is this list? Why is it when you go to Land Dept. to ask for a list they don't have it and instead they ask you the name of the project? Anyone would like to try to send an email to Rera to get an answer???? Stop these lies.

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Posted by: Raj Tuesday, 8 May 2012 3:32 PM[UAE] - UK

Dubai Cube hotel apartments in Sports city were supposed to be handed over in 2010. Work had started and constructions stopped in 2011. I have not been able to contact the developer and understand the bank have pulled the plug. Could someone in RERA or any other regulatory body in Dubai would assist me ans my other 9 investors in this project.

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Posted by: Ahmad Tuesday, 8 May 2012 3:30 PM[UAE] - UAE

Dear Rera,
Its over 4 years now and the Image Residences project by Al Fara'a Properties is still not started. Even ground breaking is not done and the extra money from escrow account is also taken out. They don't even own the land (zone 4, DTJA) but wrongfully own millions of dirhams of people like me. Please let me know why the Image Residences project is not yet cancelled by Rera. Why no one is inspecting this project, as per the rules of Rera. Please cancel this project so that people can get their money back which is wrongfully held by Al Fara'a Properties.
I look forward to your reply.
best regards,

Posted by: Muhammad Tuesday, 8 May 2012 4:58 PM[UAE] - UK

yes i too have money stuck in that project. They are doing nothing but ignoring the issue.

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