Dubai developers shrinking

According to the latest figures from the Real Estate Regulatory Authoritythere are currently 500 developers registered in Dubai compared with more than 800 in November, a staggering drop of 40 per cent.

Although many in the property world say that it is a positive situation as it means that it is only those that have the finance to go ahead with projects that can do so at the moment so there is less risk for property investors.

But even those who are able to move forward are seeking ways to reduce costs. Emaar Properties, the Middle East's larges listed property company, has confirmed that it is in talks with contractors and consultants to reduce costs.

'Some development companies were registered but have now decided they don't want to develop because of liquidity, which is a good thing. Others were forced to cancel their registration because we were sure that their developments would never be real,' explained Marwan Bin Ghalita, Chief Executive of RERA.

Dubai's once-booming real estate sector has been hit hard by the global financial crisis as property prices fall, jobs are cut and developers cancel or delay projects.

RERA plans to introduce a system soon that will rank developers according to financial stability and market experience, Bin Ghalita said.

A spokesman for Emaar Properties said it was a sensible move to re-examine costs. 'Emaar Properties is in discussions with our contractors and consultants regarding the procurement strategy to achieve potential cost savings from the decline in the price of raw materials globally,' the Spokesman said.

'This is part of our strategy to take advantage of opportunities arising due to current global economic conditions and ensuring higher returns for our shareholders,' he added.

Source: www.propertywire.com