By Staff writer
Emirate shouldn’t aim for return to boom-time construction, says Dahi Khalfan Tamim
Dahi Khalfan Tamim, Dubai’s chief of police and head of the country’s budget committee, urged in a news conference Monday that Dubai slow real-estate development.
“Dubai shouldn’t expand its real-estate sector as it did in the past,” Khalfan said. ‘‘We should slow activity, and there should be a ceiling.’’
Dubai, the Gulf’s trade and tourism hub, had the world’s fastest- growing property market from 2006 to mid-2008 because of rising demand from a growing expatriate workforce and speculation fuelled by borrowing.
Prices quadrupled in the six years following the 2002 decision to allow foreign ownership of property in designated areas.
That ended after Lehman Brothers Holdings collapsed in September 2008, setting off the global financial crisis. Rents and prices fell an estimated 60 percent from their peak as speculators fled the market, triggering an emirate-wide real estate crash.
About 50 percent of Dubai real-estate projects were cancelled or suspended after the collapse.
Dubai said in June it had cancelled 217 property projects as of May 31, following a review of more than 450 projects. The emirate said it expected 237 developments to be completed “in due course”.
The total value of property sale transactions plunged to AED119.5bn at the end of last year from AED152.9bn a year earlier, it said.
A Reuters poll found in July that house prices in Dubai could tumble a further 10 percent amid the 18,000 new homes expected to hit the emirate’s market by year-end.
The UAE government said in June it would offer three-year visas to owners of properties worth AED1m or more, replacing visas that require renewal every six months, in a bid to spur interest among foreign buyers.
This guy should reposition himself as the Head of Dubai's budget committee instead of being the top cop, because he speaks a lot of sense. Dahi Khalfan Tamim is clearly one of the visionaries leading Dubai out of its chasm, so a better positioning is required and his statements will have incredible power.
Real Estate is already slow in Dubai - The announcement of the 3 yr. visa did not make any difference. So the Govt. needs to do nothing for a slowdown.
Should this be understood as an answer to the new visa policies?
Well the Chief is correct there should be a moratorium called on yet more building, however 237 projects that will continue to completion is a large percentage from 450.
For a start, even if these swathes of property stand empty, which they undoubtedly will, Mr Tamim has still got to police a considerably larger urban area against theft, unlawful occupancy, etc, etc, which represents unecessary per capita cost. Does the 5% property tax collected, which seems to apply across the board now via utility bills, supposedly contribute in part to law and order funding? If so vacant properties means less tax contribution to police funding, however same area still needs to be policed.
Would this slowdown apply to state backed developers? Talk of reinstating Dubailand projects for example. According to regular reports developers are all looking to complete and handover projects and receive the final payments even if the project is only 50 per cent sold and there is no demand for the remainder
I always wait to hear the opinion of Mr. Khalfan, through my 12 years stay in this generous country. I have seen lots of transparencies coming out from Mr. Khalfan's statements and they mostly hit the target without any direct or indirect diplomacy.
I had grown fond of his spot-on advice through the years and I thank him for always being true to his beliefs.
it's kind of fresh breeze for us the expats.
Give people the equivalent of a green card/permanent residency and watch how they flock back to Dubai. Why is it so hard for the government to consider this. Unbelievable how many solutions are out there...and yet people are still scratching their heads.
that is a smart proposal,restrictions almost always increase demand.Property construction ceiling will however increase rent rates in the long run and thus increase the chances of higher inflation as a result of them.
Saying that one should choose between drag on the economy e.g housing slum and booming construction/housing e.g GDP growth.
Clearly Dubai will be better off in a tightly supplied housing market with higher rental yields resulting in a higher goverment revenues e.g housing fees,rental yields,etc.
Mr.Tamim seems to be a visionary and knows what is best for DXB and all of us.
I have immense respect for our visionary Lieutenant General Dahi Khalfan Tamim whose wisdom is flawless and piercing. To preserve whatever remains of the UAEâ€™s national identity, one of the impediments to the influx of foreigners to the UAE is to put a moratorium on the real estate sector and apply a quota system that would ensure that the number of other nationalities should not be more than UAE nationals and Arabs.
its interesting that a police chief is commenting on Real State market !
Is that a part of police work !
And if the rest of the world reciprocated where would the wealthy in the UAE go on holiday? or where would they send their children to be educated? or where would they go for medical treatment. Lets be frank, the Emiraties love being part of an open society - it benefits them as it does the expats who bring their expertise to help build and maintain the UAE.