Developers must stick to real estate basics and projects with “no” end-user demand have to be stopped, a realty expert said yesterday.
“If there is no demand for project… just stop it. Spend the money where it is more useful. There are a large number of small and medium enterprises who don’t want Grade A office space and that is the reality… there is a serious need to rethink which projects must go on,” David Le Bail, Director, DTZ , said during a panel discussion at the third Arab Real Estate and Urban Development Conference.
Dubai’s Real Estate Regulatory Agency (Rera) Chief Marwan bin Ghalita said yesterday “projects that are not good for investors will not go on.” Rera has already cancelled 202 projects, while work is currently continuing on 220 projects.
On asked if higher oil prices were having any impact on the regional real estate market, Craig Plumb, Head of Research, Jones Lang LaSalle Mena, said: “Higher oil prices have a positive impact on the real estate market since the additional money is put into the development of infrastructure and meet affordable housing needs.”
However, there is no direct relationship between the two, he said, adding, “There is one big negative… if the oil prices rise too excessively it could have a negative impact on the global economy.”
Echoing the same sentiment, Le Bail said increase in oil revenues of GCC states will be ploughed into the real estate sector.
Oil prices were hovering above $98 a barrel on Wednesday with the International Energy Agency expecting a negative impact on the global recovery if oil prices remained above $100 a barrel throughout the year.
Emirates Industrial Bank said that the six GCC countries, which control nearly 45 per cent of the world’s proven crude deposits, have posted a collective record fiscal surplus of around $55.4 billion in 2010.