Developers and other attendees seemed to be in higher spirits at this year’s Cityscape property expo in Dubai. Many billion-dollar projects that were put on hold during the fallout of the global financial crisis are being renewed and the announcements had expo attendees feeling upbeat. The annual event didn’t carry as much pomp and circumstance as those held before the crisis in part due to an oversupply issue facing some areas of the city that new development plans wont’ help. Experts warn, however, that speculative buying could drive up prices and hurt the market, and emirate officials should be careful of allowing that to happen again. For more on this continue reading the following article from Property Wire.
The annual Cityscape property expo and event in Dubai is more upbeat this year with developers unveiling billion dollar projects as optimism returns to the emirate’s real estate markets.
It is still a far cry from the glitz of previous events before the global economic downturn but throughout the event there is generally a more upbeat feel.
Some projects that have been put on the back burner because of the economic downturn are being revived including the Taj Arabia complex, a $1 billion replica of India's Taj Mahal that includes a 300 bedroom hotel.
The emirate has restructured billions in debt since 2009 and seen its trade and tourism sectors benefit from its safe haven status during the Arab Spring political unrest in the region.
But while the property sector has recovered in pockets of the city with prices rising, the market is facing a glut of oversupply in others.
Projects launched include the Meydan Tower, the largest new project by a Dubai developer since the property market collapsed four years ago. The tower is part of state owned Meydan's ongoing $3.8 billion residential development project, which includes man made canals, lagoons and horse riding trails, and will be financed through pre-sales.
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, believes there is demand again, especially at the high end.
;The best sign is that property worth 880 million dirhams ($239.59 million) sold in the first day of sales,’ said Ali Rashid Lootah, Nakheel chairman.
But the emirate has to be careful about repeating mistakes from the past when speculators drove up property prices which then collapsed by up to 60% in some locations. ‘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. This is a bit scary considering what the market has seen before’ Matthew Green, head of research at consultancy CBRE, told Reuters.
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 advised to be wary.
Property developer Deyaar, which was badly hit by the property crash, is now predicting a profitable 2012 due to what is says its a recovery in the real estate market and increased revenues from sales.
‘Based on our results in the first six months of this year, we expect positive numbers for 2012,’ said chief executive Saeed Al Qatami. He added that the firm is currently selling around 400 units, some of which were owned by Deyaar and never sold. Around 60% were forfeited from clients who could not pay.
This article was republished with permission from Property Wire.