By Damian Reilly
'No master developer in Dubai was above the law,' says Bin Ghalaita
State-backed master developers in Dubai are damaging the property market’s prospects of revival by continuing to build during the downturn, the CEO of the emirate’s real estate watchdog RERA has said.
Speaking exclusively to Arabian Business, Marwan bin Ghalaita said: “Everyone is saying there is too much supply…. One of the factors of any real estate market is supply, but supply in Dubai real estate market is coming from master developers, Nakheel, Dubai Holdings and Emaar, and sub developers. And we need as a regulator to watch for the master developer, not the sub developer. Because the master developer should understand, believe that, that they are damaging the sector by introducing more supply.”
Last month Nakheel announced it had recommenced work on three projects – Jumeirah Park, Al Furjan and Jumeirah Golf Estates. When completed, the projects will add in the region of 3,000 new homes to the Dubai market.
Bin Ghalaita, who has been CEO of RERA for three years, added no master developer in Dubai was above the law, which his agency was mandated with imposing.
“There is no developer above the law. Or sub developer. Nakheel, Emaar, Dubai Holding, all of them are following the law of the regulatory agency. All of them. There is no exception. If any of them has any assumption that they are above the law, then let them read the law. The law did not exempt anyone…. But people think ‘oh those are the master developers, so they are exempt.’ No, no, no.”
Speak with owners and tenants in Nakheel projects. They raise fees and charges wherever they can, without any approval or legal justification. Example: PDC capacity charge or ridiculous high service charge, of course without any service and maintenance.
I really appreciate the boldness of the CEO to say the truth to the public. Let this be examples of true leaders in the Emirates. Cheers to him.
what do you say to buyers who are already paying interest on their mortgages whether connstruction progresses or not? Those who realise that their property will most probably never recover to the price they bought at, would still want to receive those units instead of just paying the interest on their mortgages without getting to see the unit.
Looks to me like RERA is putting things in order, and the CEO has drawn the line and said enough, I hope he follows up with all developers in Dubai and put an end to their incompetencies.
Come on Arabian Business, you're not actually gona make a story out of every sentence this guy says ..
I'm not aware of any new projects being launched into the market since the financial crisis in 2008 - given the level of oversupply, and the problems that have been exposed with Dubai's legal and regulatory environment, I don't expect that to change. So The RERA boss must be talking about master developers who proceed with projects that have already been released and sold. It is surely his job to ensure that they build those developments as contracted, and not to criticise them for honouring contracts with clients (albeit years too late, in most cases).
This issue is central to the current market dynamics since some projects are in a state were the developer is detached from the effects of completing their project as the new units that will be generated by their project will not be sitting empty on their books but will be the responsibility of the small investor that purchased the units off plan. So the developer will continue regardless of their project's contribution to the over supply. This is a fundamental issue that needs to be addressed in order to limit the progressive damage being caused to the sector which will only prolong its current depressed state
This is just talk. Let see if any action follows, we have seen lot of good words in Dubai.ww
Right on. It is time for the truth about Dubai real estate market to surface for all concerned.
When you buy a new house in the UK, you only pay Â£500 to Â£1000 as a non-refundable deposit, before it is completed.
Normally you pay 10% on exchange of contracts, 4-6 weeks before you move in. You only borrow the mortgage money from the day they hand over the keys.
It is compulsory that the builder includes a 10 year NHBC guarantee. My neighbors and I all had badly constructed houses demolished and rebuilt, after six years, thanks to that guarantee.
They need to adopt the same system here.