Surge in developers planning to restart stalled Dubai projects

Dubai is experiencing a surge in the number of developers seeking planning permission to restart stalled housing projects as property values in the emirate soar.
Dubai Land Department said it had valued Dh20 billion of properties for Dubai Municipality to assess planning consent or building permit fees during the first half of this year, almost double the Dh10.5bn it valued during the previous six months.
The increase helped to push the total number of valuations undertaken by the department during the period up 69.8 per cent to 2,388, while their value increased 41 per cent to Dh89.3bn compared with the previous six months.
"As well as an overall increase in values, we are seeing a definite increase in the number of properties we have been asked to value in order to determine fees due to Dubai Municipality," said Mohammed Khodr Al Dah, the head of Dubai's Real Estate Appraisal Centre, known as Taqyeem.
"These have been both for developers for stalled schemes where the building permit has run out and needs to be renewed and also for owners seeking to change the planned use of a building from offices to housing," he said.
Taqyeem is charged with undertaking property valuations for both the public and private sectors and makes millions of dirhams a year in fees for the Dubai Government.
Just over half (50.3 per cent) of the total amount of property valued was for empty plots of land or incomplete structures, while the remaining (49.7 per cent) of valuations were undertaken on completed structures.
According to Taqyeem, land values in the upmarket Al Barsha district, which includes Mall of the Emirates and the Dubai American Academy, rose 50.2 per cent to Dh1,310 per square foot year on year. At the same time, prices in the Al Nahda district on the city's eastern border with Sharjah increased 71.9 per cent in June compared with a year earlier to Dh667 per sq ft. Land prices were the highest in the Burj Khalifa area - at Dh1,960 per sq ft in June. The area with the lowest reported prices was Nad Al Shiba, at Dh223 per sq ft.
Tayqeem also reported a threefold increase in valuations undertaken for family members to transfer property to each other without money changing hands.
The committee valued Dh23.9bn worth of property for this purpose in the first half of this year compared with Dh7.3bn for the previous six months. "As the market improves we are seeing that a lot of people are trying to be smart with their assets," Mr Al Dah said.
"Sometimes this is for tax purposes in another country or sometimes it can be to avoid putting these affairs through the Sharia courts when somebody dies.
"We are definitely seeing an increase in the number of valuations in this area and they are usually for smaller properties, perhaps one or two-bedroom flats in the freehold areas," he added.


lbarnard@thenational.ae