Dubai should write-off or restart stalled projects, analyst says

26 Jun 2011

(MENAFN) Analysts say that Dubai must intervene to either restart or write-off stalled real estate projects, Arabian Business reported.

Analyst Matthew Green, head of research and consultancy at CB Richard Ellis, said that developers are freezing projects to avoid investor claims. Developers may have already spent funds from sold, incomplete units. With tight finances after the 2008 crisis, developers may struggle to pay back investors.

The government must help finance important projects, but prevent over construction, Green said. An increase in supply could decrease Dubai’s housing prices, which already deflated by over 60 percent after the global financial crisis.

By the beginning of June, Dubai canceled 217 uncompleted projects. 250 more projects are still suspended, Scream point Property Observer data showed. 107 of the suspensions are Nakheel projects, 42 are Dubai Properties Group developments, and 36 are Minzin, a subsidiary of Dubai Holding, ventures.

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