By Elizabeth Broomhall
Dubai saw 20% hike in property transactions in first quarter, worth AED30bn in total
The number of real estate developments in Dubai facing cancellation this year has risen from 300 to 500, the emirate’s property watchdog said.
The projects and their backers are being assessed for financial viability and a list of the terminated developments will be released “very soon”, the chief executive of RERA said.
“We have finished the technical review, site visits have already been done, so we know what stage the projects are at and the strength of the contractor. Now we’re waiting for the financial audit to finish,” Marwan bin Ghalaita told Arabian Business.
“We will release the names [of the cancelled projects] very soon.”
Dubai property transactions increased by 20 percent in the first quarter of 2011, compared to the same period a year earlier, Ghalaita said. Some 10,552 transactions took place, with a value of AED30bn.
Dubai's property sector was hit hard by the downturn, with billions of dollars worth of projects put on hold or cancelled after real estate prices fell more than 60 percent from their peak.
Speculators caught with multiple properties and little chance to turn a profit fled the market and defaulted on purchases, while other buyers continued to honor their contracts, often paying installments even after work was halted in the aftermath of the crisis.
About half of real estate projects in Dubai were cancelled or suspended after the market collapse.
Ghalaita said in March that 220 projects were going ahead this year, but that RERA was still mulling fresh project cancellations in a bid to control supply.
Under the watchdog’s new scheme to curb new supply in Dubai’s glutted marketplace, any property projects deemed economically unfeasible will face termination between now and 2016.
“Our real estate sector is moving towards better planning. We want to make sure that our real estate sector is sustainable,” Ghalaita said. “The last two years we have spent a lot of time cleaning up after what happened before. Then everybody was busy counting how much money they were making, that’s why nobody was planning real estate.”
Looking forward, the emirate will keep a tight rein on any offplan projects in a bid to avoid the speculator-driven property bubble created after 2006.
“Offplan sales are becoming very regulated. It is still happening, but we are not seeing as many transactions,” he said. “Any new project that comes online will be part of a complete community, with infrastructure, healthcare and amenities; this is the new trend that’s coming to Dubai.”
RERA does not have a clear focus of the real estate scene in Dubai. It's been 3 year's after the downfall now & they're still undecided on the projects to build.
What about ajman emirate city ?Lots of projects is not register not even constructed and developers dont answer investors just take money and do nothing.
How about building roads to already existing buildings where investors spent Million of $s on their properties. I had a million$ flat in a building in Marina and I still have to walk out of the build to a dirt road, clean my shoes every time I step in our out of my home, clean the car very other day and the building entrance is never clean! Anywhere in the world if you spend this kind of money you get at least a decent entrance to your property! This was supposed to be done three years ago and I don't know if it will ever be done! Is this part of the community planning that has been put in place!?
What will hapened with the money that so many investors payed as deposit:up /25%.knowing that the developers just vanished.
The Beauty of Rera is that,they issue a statement every 2 months,to keep the investors happy .
Also investors are more and Developers are less ,so it is more comfortable to issue statements ,which favors the developer.
Three years have passed ,when the projects ,were put on hold ,and still are on hold.
It will be interesting to note that ,the developer takes cover under the article of Force Majeure ,and does not starts its project ,but is insisting that the Payment due to investors should not stop on top of it ,we receive notice from RERA ,that we have one month to settle ,otherwise our money will be forfeited .
I think the developer and Rera are both the face of the same coin .
Well, 3 Dana group. nothing happen . our money stuck there and they dont even started anything ..is there anyway we can get back our money..
A RAY of hope and action plan from RERA is a good news for the actual users / genuine investors who have invested hard earned money in lot of projects. REMRAAM Phase-3, one of the Dubai Holding projects not having started constructions for 3 years also needs attention. Let us hope for the best. Leena
I agree with Iqbal. Escrow accounts oponed for the safe guarding of the investors money...and nothing...money isnt in the accounts, property in some cases not even registered with RERA and the developer still gets away with it under the watch eye of RERA....where is the trust and the transparancy they al talk about....Ä± have invested in a project that was due to be handed over in 2008, piling hasnt even been done till today and we still hear nothing from the developer as towhy we cant get our investment back although they are in breach ....where is RERA when you need them
What will be the implications to investors and developers if RERA cancels a project? does the investor get his money back?
No. Unless you can go to the court and fight for your money back. True ,the fact a project is officially cancelled might strengthen your case. We have heard the same promise in the past about disclosing lists of cancelled projects yet until now nothing has been published.