By Tom Arnold
Report says recovery is set to return to Gulf construction sector by next year.
More than 400 projects with a total value of over $300bn had been placed on hold or cancelled altogether in the UAE, according to a new report on the construction sector released on Tuesday.However, stability would begin returning to the Gulf state’s construction sector this year, with signs of recovery emerging during 2010 as cash flow shortages eased, according to the report by Dubai-based research house Proleads Group.
“From our cash flow projections for the industry, we see the UAE construction market beginning to stabilise at current levels and showing some signs of recovery during 2010,” said Emil Rademeyer, director of Proleads Global.
Although a slowdown had cut the number of new projects launched since mid-2008, the UAE remained one of the most active construction markets in the world, with more than 750 projects under construction and 450 completed recently, it said.
The commercial and retail sectors had seen a reduction in new construction projects being started, with education and healthcare projects being placed on hold more often than in the past.
A slowdown was also hampering the leisure and entertainment construction sectors, along with an increasing rate of cancellations in the residential sector, the report concluded.
But multiple projects in several sectors were still scheduled for completion up to 2011, with most set to be finished in 2010.
A liquidity squeeze combined with slackening demand within the UAE’s real estate sector caused by the global economic downturn has led to a dramatic reduction in new building projects and delays or cancellations to existing developments.
Emil Rademeyer, director of Proleads Global, is clearly a long way from the vlaktes, because he has completely lost track of honesty and native intelligence. There is not a single fact in this entire story, not that AB ever requires that from people in property and construction. He is talking through his kappie again and this is not good for the industry at all.
OK, not that it's semi-official since AB has come out, again, with fantastic statements and numbers, we are officially predicting a turn-around by mid-2010. Yeah right! I think Proleads Global is only trying it's level best to calm the markets DURING a storm. It's not rocket science when we see so many people just jumping the lines to BUY properties or Register them with RERA. Confidence will return to the industry ONLY if the govt is more aggressive. Being laid-back and catering to the Developers is not a solution! The BUYER has to feel Secure enough with investing money in this country. With the current Laws, and regulations for visas, i doubt people will come back in droves. I am in the market for a property, but I'm SURE I'll just rent it out. I would hate to be on the receiving end, if the RULES changed later, and I'm one of the DISTRESSED Seller willing to get out. No Way....
Dear sir Recessions give an opportunity for a entrepreneur to improve his project plan midway, modify offerings and skill sets, taking into worst-case scenarios and quicken the speed of projects. Cancellation and delay of projects may seem a easy way out but only result in time and cost over-run.
You gotta ask you self: when the biggest companies who are responsible for the Palm Daira, Jebel Ali and The World are putting there projects on hold (canceled) then what about the rest? It is obvious that the market is not going to change any time soon. 400 projects canceled (stated in the article) says it all. Is there not a risk that it becomes 410..420...500? And who can guaranty that, the real estate agent or DAMAC? Don't think I need their advice! For the time being there are no guaranties and I would be very cautious buying anything in Dubai for the next 10 years. Have in mind that a lot of people have left and they don't have a lot of nice things to say. Moreover, the rest of the world is waiting to see Dubai's prestige projects being completed (The World etc..) which is not going to happen any time soon. Hence, investors will most likely have there eyes set one other investment opportunities around the world which can attract people to live for more than just 4years and with proper infrastructure and self sustaining industries and proper legislation which everyone abides by.
One thing a lot of people are forgetting is that Dubai and rest of UAE are attemting to build what has taken some countries some 45 - 60 years. They are also forgetting this downturn is a global sunject and Dubai is not the only place affected in the world. In the UK there are fears that unemployment levels could reach 4 million from the current 2.8 million if the government decides to make public sector cut backs, by the end of 2010. In the USA, people who have had their homes "repossesed" by the banks, some of them have ventured into living in tents, devloping country characteristics. For things to return to normal will take a long time. Countries all over need to trade real money ie gold and fiat currencies, only then will we see some sort of sustainable economy. Those people complaining about Dubai living in Dubai should come to the UK and USA they will really see how bad it is.
The difference Hannan - is that in the UK and the USA they admit there is a problem. The other difference is that Dubai's economy has been largely built on property and tourism, and as such the fundamentals are not as solid in the long term. Dubai is not a terrible place to live, but it is in quite a lot of trouble at the moment.
Denny - Agreed. I take your point. By admitting or not admitting does not make the problem go away. UK is now in so much debt that it will take one generation to be repaid. Dubai is facing its first recession. Whether they admit to the problem or not doesn't mean anything. Actions speak louder than words.
This is the point the optimists and others seem to miss. Economies don't just get better on their own, they need to be made better, and for that to happen there needs to be trust. And trust, in almost any part of the world comes from understanding, not from blind optimism. Consequently, it is very demeaning to suggest that there is no need to understand the problem, because, by implication, there is no difference one can make. Many of AB readers are in significant positions, and with an improved level of power we can together make a significant difference to addressing the problems that we understand. One reason, I believe, that Dubai has been hit harder than almost anywhere in the world is that there has been a failure to assume that individuals matter and we all make a difference to solving problems.
I am from Ireland, i purchased off plan on Jasmine Gardens the world, Dubai in 2006, i have 50% of my property payed for, no work has started on the project yet but there is only about 10% of this money left in esscrow, where has my money gone.I am told by RERA that this money has being taking to buy the land , but i talk to other poeple that have bought in the same place as me and all there money is in escrow.Things are so mixed up in Dubai and they are getting a really bad name with investers, i would not do any more investing in Dubai/Uae. There are hundreds of people in Ireland with hard luck stories about Dubai and not being able to find where their money has gone. REAI need to act fast. They are forming a big group in Ireland at the moment to go after this money (www.concerneddubaisportscityinvesters.com). If you know anything about Jasmine Gardens The World contact me email@example.com