Property in Dubai

Clearing up the mess left over from the Dubai property crash ...

The construction monitor service Proleads has confirmed that out of 1,110 construction sites in Dubai, 243 have been cancelled or placed on indefinite hold. Of the 867 projects remaining only a ‘very small percentage’ are proceeding on schedule.

That leaves the financial and commercial capital of the Middle East knee-deep in abandoned construction sites and half-built buildings. What on earth is to be done to clear up this unsightly mess?

Dubai construction on hold

According to The National newspaper just seven per cent of the 742 projects listed on the Real Estate Regulatory Agency website are on schedule, 66 per cent are delayed or seriously delayed and 20 per cent are on hold.

It is the same story but to a lesser extent in Abu Dhabi, where the construction boom started much later, and the northern emirates. But at least perhaps in the UAE’s capital city construction has not actually begun on many projects so the impact of the real estate crash is far less visible.

The problem is that the money for construction has run out and no further credit is available to developers. Meanwhile, those who bought off-plan are hesitating to make further payments into projects that are on a go-slow.

It is something of a stalemate as Jones Lang LaSalle terms the market standstill. And it is not even as though the projects could be easily shut-down and sold-off. Most of them are subject to legal disputes of uncertain outcome and duration that would put-off any potential buyer.

However, buildings can not stand half-built indefinitely. Their frames are not designed to take the damage inflicted by exposure to the elements in a city where summer temperatures top 50C.

Desert solution

If the courts and regulators cannot deal with the situation then the desert will begin to reclaim its territory from the developers. Forces of nature can conspire to resolve even the most protracted legal disputes.

Eventually the skeleton buildings will have to be demolished. But it would be tragic if some of the 80-90 per cent completed skyscrapers of Dubai also had to come down.

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