Developers in Dubai are slowly returning to stalled projects, despite a 20-month property backlog that threatens to further erode prices. Vacant property levels are just as bad in neighboring Abu Dhabi, where developer desire to see rental income is fueling some project completions. See the following article from Property Wire for more on this.
Work is starting on mothballed real estate projects in Dubai despite a feeling that there is already an oversupply of at least 40,000 property units.
Nakheel, the troubled real estate developer, has re-started work on two of its projects, Jumeirah Park and Al Furjan. It said that 523 villas on Al Furjan will be ready as soon as the first quarter of next year. And 289 villas in the Jumeirah Park project will be handed over by the end of 2011.
The developer confirmed that it had received ‘necessary support’ from the Dubai government to complete the Jumeirah Golf Estates development which was suspended in 2009 due to difficulties over contractor payments.
Analysts have warned about a severe over supply with some putting the number of empty property units at 40,000. Dubai real estate prices will continue to drop because of the oversupply, according to Mohamed Alabbar, chairman of Emaar Properties. ‘We need 20 months or so to go over the excess supply,’ he said.
He also confirmed that his business will look elsewhere to generate income. Emaar plans to generate 50% of its income outside its home market in the next few years and is looking to Syria, Lebanon, Algeria, Saudi Arabia and Egypt as the best countries.
The latest figures also show that neighboring Abu Dhabi is facing a similar situation. Abu Dhabi currently has a total of 40,593 vacant properties, according to figures from the Statistics Center Abu Dhabi (SCAD). Of these, 43.4% are located in Abu Dhabi city, 40.5% are in Al Ain and 15.8% in the Western Region. Another 10,149 buildings are currently under construction, the company added.
SCAD said it expects that those under construction will gradually enter the market and raising the supply graph.
Meanwhile Abu Dhabi developer Sorouh Real Estate said that it plans to deliver 2,500 new homes in Abu Dhabi by the end of 2012. The Emirate’s second largest developer by market value will begin handing over homes in the first quarter of 2011 and is focusing on delivering existing developments near completion to generate rental revenues.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.