Developers in Dubai are beginning to face the same issues as other property developers around the world. Falling prices and dried up credit means that customers are not so keen to pay for off-plan developments that are now worth considerably less than the agreed prices.
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Some time ago, we wrote a post suggesting that Dubai’s growth was unsustainable, and that a crash was inevitable. This seems to have upset a few people, judging from some of the comments. Certain people feel that this was a personal attack on the people of Dubai rather than a prediction for investors to take heed of. This is a choice selection of comments:
The Central Bank of the UAE has just bought $10 billion of the $20 billion long-term bonds Dubai issued on Sunday. The five-year bonds pay 4% per year.
“This is a clear step from the central government to back up Dubai,” said Khald Masri, a partner in Rasmala Investment, a very active investment bank in the region. “The central government’s step will help ease the tense situation in the local economy and markets.”
More on Dubai Bubble Update – Another $10 Billion goes into the hole
Once again, more downs than ups in the property investing markets.
- Emaar properties, Dubai-based owner of John Laing Homes have filed for bankruptcy protection for the American firm. John Laing Homes is one of the largest home builders in the United States and the 31st biggest in the world. Or at least – they were. Luxury property blog.
The Dubai International Property Show opened today with almost “no visitors” according to Property wire.
‘These are the difficult times and we must admit the reality and then find the solution,’ said Abdullah M Al Shizawi, managing partner of Heart of Capital.
More on Dubai International Property Show a Flop and Another Broker in Dubai Goes Under
Yet another Dubai property developer is in a position of being unable to repay small investors after canceling or delaying a project. This time, “Aspire Real Estate” has been forced to hand their “Jehaan” project over to a third party after numerous investor complaints and bounced cheques.
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A few moves are being made to ease investor’s concerns over the dubious practices by developers and the growing dissatisfaction with the way things are being handled when developers cancel or delay projects in Dubai. Property buyers can contest their “terminated” off-plan contracts, signed after August 31, 2008, in the newly set-up Property Court, but will have to go through the Dubai Land Department (DLD),.
The global downturn has turned dreams to nightmares for many expats in Dubai. Dubai developers are shedding staff as fast as orders and projects are canceled. Unfortunately, what this means for many is a hasty retreat from the country. As soon as a redundancy notice is issued, work visas are canceled, which means one month to get out of the country.
More on Dubai Dreams Sour – Expats forced to skip and Oil spills continue
Credit Suisse expects earnings of Dubai-based developers to reflect the impact of the the global liquidity crunch that has slowed down the sector drastically.
In its fourth quarter preview on UAE real estate, Credit Suisse said it is projecting higher earnings for Abu Dhabi-based Aldar Properties and Sorouh Real Estate but expects the opposite for Dubai’s Union Properties and Emaar Properties.
More on Credit Suisse Forecasts Sharp Fall in Q4 Profits for Dubai Realty Sector
HSBC Plc slashed its price estimate for property giant Emaar Properties to Dh8.5 from Dh13.9 amid plummeting real estate prices and the first rash of foreclosures in Dubai.
“The estimates cut will reflect the likelihood of further market weakness,” said HSBC, citing its survey which showed Dubai property prices in December fell 23 % from their September peak. HSBC said the possibility of a more prolonged economic slowdown may force Emaar to postpone or shelve its projects until there are clearer signs of recovery.
