Dubai property doom continues and investors who have been lured in by aggressive marketing campaigns are paying the price for government’s inability to apply effective controls when greedy developers had their filed days.
According to the news, RERA has recently canceled 202 real estate projects in Dubai and won’t allow developers to start new ones without funding them in advance as it works to control supply.
About 33,000 new housing units will be added to Dubai’s market by this year, exacerbating a vacancy rate of around 40 percent, Colliers International estimated. Property prices have fallen by almost 60 percent after banks curtailed lending and speculators left the market.
RERA is canceling projects where little or no construction has taken place or where buildings are far from city infrastructure. Projects in which the majority of buyers were speculators and have ceased payments or those owned by developers who can’t show they are capable of finishing the work are also being stopped or delayed.
It is uncertain when and how the investors will get their payments refunded for the projects canceled by RERA. Most of these projects are under construction since 2008 and investors, most of them genuine, have so far suffered a lot.