| Kippreport.com

Dubai builders dust shelved plans off

October 3, 2012 4:28 by Reuters

Meydan is home to a racecourse and hotel development that hosts the world’s richest horse race with a $10 million purse.

Developer Nakheel, whose extravagant projects helped trigger Dubai’s 2009 debt crisis and which has written off about $21 billion from its portfolio since the crash, pitched its third new project this year.

“If there’s no demand we would have not launched the project,” Nakheel Chairman Ali Rashid Lootah said at the launch. “The best sign is that property worth 880 million Dirhams ($239.59 million) sold in the first day of sales.”

Long line ups last month to purchase new property from bluechip developer Emaar Properties were reminiscent of Dubai’s real estate heyday when buyers hired people to stand in queue overnight to snap up new projects.

Industry watchers say such images suggest the excesses of the past, when speculative investors flooded into the market, could return.

“You have to look at these launches and how quickly these units have been sold out and realise that there’s again some speculative buying,” said Matthew Green, head of research at consultancy CBRE, which forecasts another 49,000 homes will come on the market by 2015.

“This is a bit scary considering what the market has seen before.”

For potential buyers, there is more choice at Cityscape after three bleak years when few or no new projects were announced by cash-strapped developers. But investors are wary after the bust left some with neither property nor money after builders cancelled projects, or went under.

“People won’t buy easily. It all depends on what rules and laws are set up for the safety of investors,” said Roy Simon, who has bought property in the emirate.

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Tags: dubai building demand, Dubai properties, dubai real estate, nakheel