Cracked: The UAE property landscape continues to ebb and flow
Developers raise the stakes as individual landlords struggle to keep up. Is the property market really increasing or is it continuing to crumble, asks Emily Lucas.
June 21, 2011 3:25 by emily.lucas
This week has been a rollercoaster for the property sector. Signs of progress are sporadic yet evident, with some developers continuing to struggle and investors remain in property gridlock.
Here’s our little roundup of this week’s little highs and little lows:
Having fallen behind within the first quarter of the year, with a 1.8 percent increase, twenty-five out of fifty countries reportedly had a negative growth compared to previous years with only 18 counties within the index. It’s been reported that Dubai’s home prices were down by 8.2 percent since March last year. However, Knight Frank Global House Price Index claims that there is a show of 2.1 percent increase since October as reported in The National.
Has property market really increased within the past six weeks? Landlords beg to differ…
Under pressure as big development corporations bribe their tenants with freebies, individual landlords struggle as they compete against big developer muscle.
Nakheel have announced they are offering a two months free-of-pay for those who rent in International City or Discovery Gardens, for example. On the other hand companies like Tameer cannot afford to give away two months of rent and are instead offering deals such as a 15,000AED furniture voucher.
Now tell us, if you were given a choice between a 15K voucher or two months free rent, which one would you choose? (And more importantly, did you ever imagine property developers would succumb to such promotions post-2008?)
In any case, the property market continues on a downward spiral (albeit a slowing to a halt), with projects in Dubai still at a halt regardless of regulations towards construction hitting 70 percent completion. Many of these projects have been reviewed under RERA (Real Estate Regulatory Agency), which is yet to cancel any developments despite not seeing any improvement within the past few years. Twenty-seven projects were due for scrapping last May, although no further news has been heard on whether cancellation plans are going ahead