By Jo Anne Bladd
CEO Marwan Bin Ghalaita says watchdog has new investment criteria for property developments
Dubai’s real estate watchdog is mulling fresh project cancellations this year under a new scheme to evaluate the financial viability of developments, its CEO has said.
"We are in the process of analysing the data. Project cancellations won't happen just like that - there is a process involved and we are working on that," Marwan Bin Ghalaita told reporters on the sidelines of a property event in Dubai.
"Any project that is not good for Dubai and the investors will not go on. We have a new criteria. All the projects are going through a process which asks if they are fit for investment or not.”
The emirate has 220 ongoing residential real estate projects this year, Ghalaita said.
He declined to specify how many projects have been scrapped to date.
Dubai property prices slumped 62 percent from their peak in mid-2008 after the global credit crisis saw speculative demand wane. More than half of construction projects in the UAE’s trade and tourism hub were scrapped as funding in the emirate dried up.
The head of Dubai’s Land Department said Wednesday the emirate saw AED123bn of ($33.5bn) worth of real estate transactions in 2010.
Ghalaita said the number of real estate deals completed in the first quarter of 2011 had surpassed those seen in the same period a year earlier.
"The number of transactions has gone up in the first few months of this year, and the real estate environment in the UAE is better than last year,” he said.
It's the sole responsibility of Dubai's government to ensure that all real estate transactions are completed according to the law. The govt. should be responsible and compensate the affected people for not regulating the real estate industry properly, if evidence suggests that. Also, I'd be surprised, if an investor would consider investing in Dubai if the government doesn't do its job and build confidence in the investors community. It's time to stop protecting the developers.
To a significant extent, the future of the investment climate in Dubai rests squarely on the shouldrs of RERA / Marwan. I just hope what ever decisions they take woudl also keep in mind the well being of the investors, the golden goose which lays eggs. Unfortunately, in most cases the developers come up trumps and the hapless property investor left holding the bucket.
Reminds me of a discussion I had, late in 2007, when I was voicing my concern over what I considered "oveheating" of the real estate sector. The response from a high level member of the Dept. of Ecomomic Development..."Don't worry, all our developments are well studied. We appoint the leading consultants to run feasability studies. We are at the doorstep of India with over 1 billion people and a growning middle class who want to invest in Dubai, also from Iran and other states, people have a ot of money they wish to invest. If you consider all that is being built it is still far short of actual housing demand... a mere few thousand properties. This demand will only increase."
I think their consultants were quite spot on about the potential opportuntities from neighboring population from Iran, India, Pakistane etc. Problem is, the Department mentioned by you under-estimated the importance of living by the promises and the need to offer protection to the investor. These countries still have the moeny and the people who can buy up all properties, but wonder why they are acting twice shy !
My message is loud and clear to Mr Marwan Bin Ghalitta "Please take action rather than repeated words and stop any more loss or deterioration of investors asset value, money and rights" Dubai has taken investors life savings and money and offered nothing but talks. Mortgage companies are refusing to restructure for customers who have lost their jobs and they are repossessing properties and reselling them! other non responsible real estate development companies still throwing properties into the market to cause further deterioration of rent yield, property value and a possible second crash of real estate. Mr. Ghalitta time for action or please leave the floor to someone else to make some critical decisions to protect people's investments and prevent further deterioration. Thank you
There are lot of Indians who find the Dubai Real Estate prices more affordable considering the life style and infrastructure facilities offered by Dubai as a whole. Most of the Indians would definitely like to settle down in Dubai provided they are given proper visas based on their investment.
We pledge the government (RERA) to protect the investors. I have a mortgage from Tamweel for a flat in Queue Point -Liwan project and signed the contract in 2007. Tamweel signed a contract with the developer Mazaya, in 2009 March, with terms totally protecting the developer and fundamentally breaching the Sharia law. The developer is still continuing the construction, promised delivery was 31st of Dec 2009, with a flexibility of 12 months. As per the contract the developer actually defaulted on their commitments but neither Tamweel nor Mazaya responds to our negotiation requests. Developer unilaterally declared "Force Majeure". RERA does not help either. The litigation costs are extremely prohibitive (AED 100000 -150000) per case and the back log in courts are not very promising. We demand Dubai goverment to help the investors to get back their rightful compensations.
Liwan- Qpoint Investors please join our group https://groups.google.com/group/liwanowners
"project cancellations this year under a new scheme to evaluate the financial viability of developments"
Mr. Marwan, there isn't any financial viability simply because there are not enough people who want to buy anymore. Fix those Visa laws and hold your promises.
If Marwan Bin Ghalaita is serious about tackling the problems within the Dubai Real Estate Market then his first stop would be to tackle the Developers who have exploited the flawed Laws of Dubai for their own financial gain with no intention of building anything leaving the investor seriously out of pocket. A prime example would be Al Attar Developers who have so called "Developments" in Business Bay, Jumeriah Lake Towers and International City Phase 3. All projects came on the market back in 2005, non of which have ever been built leaving so many investors let down. Whilst RERA was set up to create "transparency within the Property market" it has failed to protect the investor against such developers. These developers are the real problem behind the Dubai Real Estate Market and should be brought to book.