Monday, May 14, 2007

Dubai realty prices announcement needs verification

Developers say that certain investments announced by the real estate companies are not inline with market reality, and the prices are just being hyped so as to place themselves at a higher level.

The construction costs are less than those announced by certain developers. This exaggeration in prices of the projects, are further pushing up the costs of construction materials and services. This, in turn, has an unforeseen effect on the rents and consequently on inflation rates.

Al Yasat Holding Group Chairman, Rashid Al Mazrouie, states that the companies launch projects announcing investments of billion of Dirhams, which in reality, are the price of housing units in the project.

This, in turn, compels the contractors and importers to increase their raw material prices and servicing fee. Masrouie mentioned that there is a need for the developers to form a real estate exchange in the UAE so that the real and logical price of each property could be fixed, rather than keeping the doors open for unreasonable hikes in prices.

The Executive Director of New Dubai Real Estate, Ahmed Ali Al Abduallah expressed his doubts regarding the unreasonable hike in property prices, and added that it could be the media propaganda to the desire of the developer in selling his projects at high profits.

Abdullah added that such an exaggeration in figures will make a negative impact on the market. He mentioned that an authority should soon be established to monitor the developers and their investments so that the developers will stop taking advantage of the media to propagate their projects.

No comments: