By Staff writer
Government bond prospectus also says emirate has outstanding debt of $31.4bn as of May 20
Dubai, the Gulf business hub where property prices continue to decline, cancelled 217 property projects as of May 31 after completing a review of the industry in the past two years.
The Real Estate Regulatory Authority reviewed more than 450 projects and expects 237 of them to be completed “in due course,” according to information contained in the Dubai government’s bond prospectus.
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.
Dubai, whose Emirates airline tapped debt markets this month, has set up a $5bn Euro Medium Term Note Program.
The bond prospectus, posted on the London Stock Exchange website, said Dubai government had direct outstanding debt of AED115.4bn ($31.4bn) as of May 20, including AED22bn at main holding company Investment Corporation of Dubai.
The emirate’s economy expanded 2.4 percent in 2010 after contracting 2.4 percent in the year-earlier statement, the prospectus said. Real gross domestic product was AED293.6bn in 2010.
Residential property prices in Dubai, the worst-performing market in the Middle East for the past three years, haven’t yet benefited from political turmoil in other parts of the region, Deutsche Bank AG said last week.
Home values declined 1.2 percent in May from the previous month and rents fell by 1 percent, according to the bank. Apartment prices dropped 1.3 percent and villas lost 1 percent.
“Despite talks of renewed interest in real estate following regional unrest, there is no visible sign of an improvement,” the analysts wrote. “Even if we believe the worst of the downtrend is now behind, new supply, lack of homebuyers’ appetite and anemic transaction activity point to further weakness.”
Great! Where is the list of cancelled projects. Is it available on any site?
What confuses me and I imagine many other people is the outstanding direct debt calculation. A year ago the IMF put Dubai's overall debt at $109 billion dollars, Credit Suisse came up with a figure of $129.3 billion dollars of overall debt in January this year.
Since then the IMF has warned that Dubai debt is in danger of exceeding 53 per cent of GDP by 2016. So could somebody explain the debt figure given in the prospectus on the LSE and also how that would be interpreted by those reviewing the prospects for the 5 billion Euro note. Taking into account all the debt figure reports that have circulated around the world thus far of course.
Perhaps that is a cue for an erudite AB article that explains the nuances of how debt figures are presented.
where can we find the list of 217 cancelled products?
first rera says 500 cancelled now is 217... regardless I would like to know where to get this list of scrapped projects... Rera website does not list any information on this...
We know that projects were cancelled, can someone tell us which ones? Is there a list? RERA is not taking the lead on protecting the investors. Where is the money that we paid as deposits for our future homes? Who is going to pay us back? whatever happened to developers depositing funds in escrow account with RERA so in case this situation happens investors can get their money back. Simply, no one cares, that's way no confidence in the Dubai's real estate market. Shame.
Actually the real total debt figure of Dubai if you include all the semi-government entities is around $170 billion. This is the figure that the top guys know about and use for their own calculations, but obviously this is not widely disemenated, especially in new bond proposals.
I believe that one of the reasons that so many people are so cautious of new investment in Dubai is that, even today, there is not enough understanding in Dubai that transparency and honesty is the only realistic way forward in a global world.
There were so many projects just on the paper and some were just scaled down models displayed by models again in the Malls of Dubai.
There were uncontrolled projects that were launched - all were seen during the Cityscapes of 2006-2008, Dancing Tower, twisted towers , Iphone tower, revloving tower all sorts. These fly by night developers even put the real ones into shame.RERA was only formed by end 2007 and was too late to control anything. God Bless Dubai
These are all numbers, no one knows whats cancelled and RERA cheif clearly said he wont release the names! So weird considering names of restaurants are released over violations, however cancelled project names are kept behind lock and key.
Just can't trust the reports are being circulated. One moment this and another moment that. Figures reported are hardly truthful.
How many of these cancelled projects hit small investors? Anyone with personal stories about purchasing residences eg in Jumeriah Village before the GFC, off the plan or as an investment after release, and who has now lost money?
RERA must reveal the names of the canceled projects. It is the only fair thing to do . How else can small investors get their money out of escrow accounts and back in their pockets ?
If what Raj says is true - that the RERA chief will not reveal the names then they invite speculation that RERA is not an impartial body.