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Dubai scrapped 217 realty projects in last two years

By Religare
Dubai scrapped 217 realty projects
Dubai, the Gulf business hub where property prices continue to decline, cancelled 217 property projects as of May 31 after completing a review of the industry in the past two years.

The Real Estate Regulatory Authority reviewed more than 450 projects and expects 237 of them to be completed in due course.

The total value of property sale transactions plunged to AED119.5bn ($32.5 billion) at the end of last year from AED152.9bn ($41.6 billion) a year earlier.

The bond prospectus, posted on the London Stock Exchange website, said Dubai government had direct outstanding debt of AED115.4bn ($31.4bn) as of May 20, including AED22bn at main holding company Investment Corporation of Dubai.

The emirate's economy expanded 2.4 percent in 2010 after contracting 2.4 percent in the year-earlier statement, the prospectus said. Real gross domestic product was AED293.6bn ($79.9 billion) in 2010.

Residential property prices in Dubai, the worst-performing market in the Middle East for the past three years, haven't yet benefited from political turmoil in other parts of the region.

View: Building the economy is easiest based on real estate. The growth rate clocked is absolutely excellent but when the bubble burst the pain is also long. Among the recent example would be the sub-prime bust in USA, it was based on real estate. Then the bubble bust in Ireland too was because of the real estate. Now with Dubai too witnessing this the hard way. It is yet to be seen how China and India manage this bubble that has been going on for last 5 years.

Story first published: Wednesday, June 15, 2011, 9:30 [IST]
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