Dubai’s government cancelled almost half of the real estate projects planned in the emirate after the credit crisis caused demand to collapse and a housing glut drove down home prices.
Out of 980 registered projects, 495 were scrapped or are in the process of being cancelled by the emirate’s Real Estate Regulatory Agency the government said in a bond prospectus posted on the London Stock Exchange website on Monday.
The cancellations have been prompted by “liquidity shortages for developers, decreasing headline real estate prices and rental rates, and increasing market uncertainty and negative sentiment,” the government said in the prospectus.
Forty-six property projects have been completed since 2008 and another 307 will be finished “in due course,” the government said without naming the projects.
The deepest global financial crisis since the 1930s led Dubai property prices to drop by at least 50 percent from the 2008 peak and forced builders to delay or cancel projects worth about $330 billion, Dubai-based market researcher Proleads estimated in April.
Values may drop another 20 percent as 41,000 new homes are put on the market by the end of this year aggravating an existing glut, said Ahmed Badr, a Dubai-based analyst for Credit Suisse Group AG.
Nakheel, the developer of palm-shaped islands off Dubai’s coast, on Tuesday announced plans to resume work on the Garden View villas project. The 134 townhouses are expected to be completed in the third quarter of 2011, it said. Last week, the developer restarted construction work in its Al Furjan project. (Bloomberg)For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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