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Sun 18 Sep 2011 12:46 PM

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Ajman to list scrapped real estate projects, says watchdog

Analysts say Dubai should follow move to name cancelled property developments

Ajman to list scrapped real estate projects, says watchdog
Scores of investors in Ajman’s real estate industry were hit when the emirate’s offplan market collapsed

Ajman’s property
watchdog has pledged to reveal a list of the emirate’s scrapped real estate
projects by early-2012, a move industry analysts say should prompt Dubai to follow
suit.

ARRA executive
director Yafea Eid Al Faraj said Sunday that the regulator planned to publicly
list the names of its cancelled offplan projects and release a progress report
on ongoing sites.

“We are doing this to give the market more transparency,” Al
Faraj told Arabian Business. “So far we’ve put [together] the names” but the
list is pending board approval.

“We are waiting [until the end of] this year to see if
developers will come back and continue projects. That’s why we for waiting
until next year.”

Scores of investors
in Ajman’s real estate industry were hit when the emirate’s offplan market
collapsed in late-2008, sending prices tumbling. In the $15bn Emirates City development
alone, more than a dozen projects are on hold, affecting hundreds of buyers.

Analysts said the
list would allow buyers to either pursue court action against the developers or
attempt to secure a refund against their initial investment.

“It will increase the level of transparency and market
information and will assist developers and investors in making more informed
decisions about the Ajman market,” said Craig Plumb, head of research at
property consultancy Jones Lang LaSalle.

 “At the end of the
day, the amount of new supply coming on to the market has its own implications.
If half the projects are cancelled for example, for supply and demand this has
pretty big implications,” said Mathew Green, head of UAE research and
consultancy at property analysts CB Richard Ellis.

“It’s also important to understand which developers seem to
be most at risk. It all helps to build up a picture of what is happening in the
market now and where it’s likely to go.

 “Given what we have
seen in Dubai, it would be reasonable to assume that Ajman will have a
relatively high number of cancelled projects as well.”

But Plumb warned
the move would also put added pressure on Dubai’s property watchdog RERA to publish
a full list of the city’s cancelled construction projects.

“ARRA has been modelled on the Dubai regulator, RERA, who
has also announced the official cancellation of up to 200 projects in
Dubai.  To date, the list of these projects has not yet been released and
this makes it more difficult to accurately predict future supply levels,” he
said.

Dubai, the Middle East’s worst performing property market,
saw billions of dollars worth of projects suspended or scrapped after the
downturn wiped 60 percent off the city’s house prices.

Speculators caught with multiple properties and little
chance to turn a profit fled the market and defaulted on purchases, sparking an
emirate-wide property collapse.

Some $170bn worth of construction projects were cancelled
and delayed in the UAE by August 2011, Citigroup said earlier this month.

RERA said in May that up to 500 real estate developments in
Dubai would face the axe if deemed financially unfeasible under new rules. The
emirate has also pledged to keep a tighter rein on offplan projects in a bid to
avoid the speculator-driven bubble created after 2006.

 

Jag 8 years ago

Well done Ajman!

This is exactly what is needed to bring in transparency and clarity.

Wonder when RERA will stop making grand, airy fairy announcements in the press and actually get down to doing at least some of the work it is supposed to do!!

ik 8 years ago

Whoever is following the Ajman Property Market knows that most of the projects on Emirates Road except for buildings under construction in Emirates City are the ones to be scrapped. This means that only freehold projects built within Ajman will be of value.

VA 8 years ago

The inaction of RERA so far is affecting the credibility of Dubai real estate market and the confidence of investors in Dubai. RERA, please release the stalled projects list, arrange for the return of the investments on these projects and bring back the investors' confidence.

Anonymous 8 years ago

Besides Ajman Uptown, what is actually under construction in Ajman??? It seems to me that 99% of what was announced is not moving forward?

Mehdi 8 years ago

RERA by withholding AED7bn in the escrow account and not announcing the list of 217 cancelled projects is killing any confidence restoration in the market. While if announced and investments are returned then most of investors will purchase their own residential units at the present affordable prices and stop paying rent. RERA must take some positive action.

Red Snappa 8 years ago

I should imagine that Ajman would be like Dubai, should a massive proportion of those that paid money to developers and ended up with nothing in return, actually receive refunds, then I doubt very much whether that money would find its way back into the real estate sector. 'Once bitten, twice shy' is I believe the moral of the story.

I have a feeling that any returned money could be winging its way back to a wide range of countries of origin, creating a bit of a run on the banks.
As I recall at property market peak, there were plans to build some 390 towers across all the different projects along and around the Emirates road in Ajman + villas.

What happened to: Ajman Green City, Ajman Marina, Ajman One, Ajman Pearl, Ajman Uptown, Al Ameera Village, Al Humaid City, Al Ittihad Village, Al Zorah, Amber Islands, Aqua City, Awali City, Emirates City, Emirates Lake Towers, Escape Equestrian Community, Eye of Ajman (Ain Ajman), Marmooka City and Park View? So few of then delivered!

Red Snappa 8 years ago

I should imagine that Ajman would be like Dubai, should a massive proportion of those that paid money to developers and ended up with nothing in return, actually receive refunds, then I doubt very much whether that money would find its way back into the real estate sector. 'Once bitten, twice shy' is I believe the moral of the story.

I have a feeling that any returned money could be winging its way back to a wide range of countries of origin, creating a bit of a run on the banks.

As I recall at property market peak, there were plans to build some 390 towers across all the different projects along and around the Emirates road in Ajman + villas.

What happened to: Ajman Green City, Ajman Marina, Ajman One, Ajman Pearl, Ajman Uptown, Al Ameera Village, Al Humaid City, Al Ittihad Village, Al Zorah, Amber Islands, Aqua City, Awali City, Emirates City, Emirates Lake Towers, Escape Equestrian Community, Eye of Ajman (Ain Ajman), Marmooka City and Park View? So few of then delivered!

Re Ralergik 8 years ago

RERA? what is RERA?

Red Snappa 8 years ago

Dear Re Ralergik

RERA is the Real Estate Regulatory Authority (sometimes referred to Real Estate Regulatory Agency) in Dubai, it is the regulator for the Dubai property market.

ARRA is the Ajman Real Estate Regulatory Authority (sometimes referred to Real Estate Regulatory Agency) which followed in the footsteps of and has a very similar model to RERA.

Developers and Real Estate Brokerages are supposed to be RERA registered, agents working for brokerages should be RERA certified. RERA is part of the Dubai Land Department it is responsible for all matters related to owner property title registration, transfers etc and also administration of escrow accounts. It's also responsible for implementing property related laws e.g. the Strata law under which Owners Associations are being set up.

In that respect, RERA has been responsible for resolving service charge disputes between developers and owners. Its level of jurisdiction over state-owned developers has remained slightly unclear?

Mohammed 8 years ago

does it mean i have paid one of the park view property T-29 & 30 approx AED 16,500 in escrow account, will get back to me..... Impossible. I have paid from my hard earnings 16,500 in cash and 16,500 in escrow account. It was assumed that escrow account amount will be the safest and in case if the project is discontinued i would get it back.