Brushing off the builders
The Dubai Real Estate Regulatory Authority is starting a new system through which it hopes to reduce the excessive number of developers in the city.
January 4, 2009 12:03 by Aarti Nagraj
Dubai’s long list of property developers could soon get shorter.
While the financial crisis is bound to shut down some of the city’s real estate offices, the Dubai Real Estate Regulatory Authority (Rera) is planning a new method to close down some others. The body will now be ranking developers in Dubai under a new system to be introduced this year, reports The National.
“We’re evaluating all of the developers in Dubai,” Marwan bin Ghalita, the CEO of Rera told the paper. “All will be graded according to their financial liquidity, their experience in the market, the number of projects and the added value they give to the community.
“There are too many of them (developers),” he said. “We need to make the number smaller so we can control them more and they can serve the market better. At the moment we’re working on this to find the exact number that’s required.”
While The National says that there are more than 100 developers in Dubai, the Rera website lists 834 entries in the developers’ category.
The property bubble formed over Dubai in the last few years not only pulled developers from across the world, but it also spawned a huge amount of smaller local ones. They managed to lure investors through great offers and promises, but with the economic slowdown, the liquidity in the market dried up, and projects have been cancelled across the board.
While the new move will certainly help Rera control the sector in a more efficient way, it will also possibly help investors decide on a developer before putting their money into a project.
But it is certainly going to be a tough task for Rera to try and fix an “exact number” of developers. How will Rera actually find such a number, and later implement it? Will it enforce more mergers? And will it prevent new entrants if the number is reached?