Delays hit 'volatile' property market

by Alexandra Dubsky Tuesday, 27 February 2007

UAE mortgage provider Tamweel predicts that construction delays could reduce the number of houses delivered to tenants in 2007 by one third.

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The company had expected a handover of 54,000 units this year, with 36,000 now expected to be delivered, according to CEO Adel Abdul Aziz Al Shirawi.
He said that real estate developers and mortgage financiers in the Middle East should focus on medium and low-cost developments to ensure a sustained return on investment.

Al Shirawi added that, given the cyclical nature of GCC economies, medium and low-cost developments and commercial projects would witness less price fluctuation in the longer term than more high-cost developments.

According to him, developers are still launching projects based on early studies, which predicted high overall demand for housing.

"Developers should dynamically evaluate demand and supply situations and the volatile and fluctuating nature of the real estate sector in the region. More careful analysis of the nature of the demand for housing shows that the situation has begun to change, and developers need to address the increasing demand for medium and low-cost housing," he said.



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