Last year, we had a copy of India’s Taj Mahal and Meydan Sobha City. This year, there were so many new project announcements at Cityscape Global that it’s been hard keeping track of them all. We had Al Habtoor City, The Lagoons, Deira Islands, Pacific Village and a whole slew of expansions to existing projects.
But for all the glitzy announcements this year, the 2013 edition of Cityscape hasn’t quite reached the heights of the 2008 version. Back then 954 firms exhibited, compared to 223 this year. But it’s still up a decent margin on the 121 firms who showed up in 2010. One thing that has changed in the last couple of years has been the traffic. I’m not sure who thought it would be a good idea to have GITEX Shopper and Cityscape in the same location in the same week, but those who didn’t turn up to either event on time were destined to spend a good hour or so trying to find a parking space.
Perhaps the biggest theme this year was that of the relaunch. So if you invested in The Lagoons, which was formerly managed by Sama Dubai (now merged into Dubai Properties Group), the fact that Emaar and Dubai Holding have taken over the megaproject just to the north of Mohammed Bin Rashid City is likely to be good news. Omniyat followed that trend by relaunching two of its long-delayed projects.
Damac appeared to go one better by appearing to rebadge its La Residence by Lotus project under a different name — despite previously claiming that 75 percent of it had already been sold offplan — and then trying to charge existing investors 75 percent more for apartments that should have been completed four years ago.
Investors that parked their cash in a property on the Palm Deira are likely to be equally displeased. While Nakheel is now pushing ahead with a project in the same location — now called the Deira Islands — the developer has also made it clear that the Deira Islands project is distinct from the Palm Deira, and that the latter remains on hold. What if you elected to buy on the Palm Jebel Ali or the Waterfront? Tough luck, I’m afraid; the plans for both projects are still suspended, and there has been no indication as to when building will restart.
It’s easy to see what’s happening here. Existing legislation dictates that developers will only be forced to return investors’ cash if a project is cancelled. But there are still no guidelines on how long a particular project can be kept on hold. It’s therefore in a developer’s interest to keep promising that homes will eventually be delivered, even if there are no concrete plans to do so. In the meantime, investors are left in limbo.
All that could change when Dubai’s new property investor protection law is promulgated. The legislation, called Tanweer, should provide certainty as to the process of project cancellation. But will it apply to existing projects? We don’t know. When will it be released? Again, we don’t know; rumours that it will be passed “soon” have been swirling around the market for a year now.
Dubai’s property market may be booming again right now, but no-one has any idea how long it will last. It’s in the interest of banks (who are making a mint from mortgages), developers and brokers to talk up the market, while the voices of independent observers tend to be few and far between. This isn’t a mature market, and — as pointed out by several real estate bosses at Cityscape — the cycles are likely to be much shorter than they are elsewhere. But if better protections for investors can be clarified — despite some short-term pain for developers in the form of payouts — then this can only help the market in the long run.