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The International Monetary Fund warned Dubai on Tuesday that the emirate might need to intervene in its property market to prevent another boom-and-bust cycle of the kind which brought it close to default four years ago.
Over-inflated Dubai real estate prices crashed by more than 50 percent in 2009 and 2010, triggering a corporate debt crisis which unsettled financial markets around the world.
The economy and the property market are now recovering, but so strongly that the IMF worries another bubble could form - and because Dubai's debt has continued to rise, it might have difficulty coping with fresh instability.
Harald Finger, IMF mission chief to the United Arab Emirates, noted that by one commercial bank's estimate, listed Dubai property prices soared 35 percent from a year ago in June.
Dubai buyers set for cash back on failed projects
Countless projects were announced during the Dubai property boom but were postponed or cancelled.
Dubai's government will establish a legal committee to liquidate cancelled property projects and settle related disputes, including paying out investors who have struggled to get their money back from developers.
The system will apply to projects that have been cancelled by the Real Estate Regulatory Agency (RERA).
Countless projects were announced during the Dubai property boom but were postponed or cancelled – either partway through construction or before work had begun – when the market dramatically dropped in 2008-09.
Many sites have sat idle for several years, although not all affected projects have been officially cancelled and some developers claim frozen projects, such as Palm Jebel Ali and The World, will still go ahead.
Last month, a twisted residential tower in Dubai Marina was finally completed after remaining part-finished for several years.
A statement on the state media service WAM says specialists and consultants will be appointed to the committee, while developers will be required to provide their audited financial status and evidence of all cash transfers and deposits related to the failed projects.
“The committee has the right to take actions and issue decisions to guarantee the rights of those who have purchased property that fall into this category,” the statement said.
The decree, issued by the ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum, immediately puts on hold any cases or appeals related to cancelled properties presently before other courts, which will no longer be able to hear such cases.
Decisions by the committee will be final, with no avenue to appeal.
OTHERS
UK construction sector reviving, ONS figures show
Housebuilders have been buoyed by the Help to Buy scheme but construction as a whole remains fragile
A revival in building has boosted the UK's construction sector, says the Office for National Statistics.
On a seasonally-adjusted basis construction output rose 4.6% in April compared with March, then flattened out in May, the ONS says.
The figures make it more likely that the UK economy will grow in the second quarter, building on its 0.3% growth in the first three months of 2013.
But output in May was still 4.8% lower than in the same month last year.
This is the first time the ONS has published monthly seasonally-adjusted figures for the sector.
Construction, which along with services and manufacturing is one of the three main measurements of economic output, has long been the worst-performing sector since the recession began in 2008.
Construction output has fallen 18.9%, compared with a 3.9% fall in gross domestic product (GDP) over the same period.
Construction volumes fell to £23.7bn in the first quarter of 2013, its lowest level since 1999, says the ONS.
'Positive contribution'
Howard Archer, chief UK and European economist at IHS Global Insight, said: "It looks highly likely that construction output made a recently all-too-rare positive contribution to gross domestic product growth in the second quarter, thereby helping growth to strengthen and broaden from the first quarter."
Housebuilders have been buoyed by the government's Help to Buy scheme, with Barratt recently reporting that its sales rate was up 17.9% in the first six months of 2013, and up 34.7% since the launch of the scheme in April.
House prices have also shown signs of a sustained recovery, while a recent survey from the British Chambers of Commerce said business confidence was at a six-year high.
"Any positive contribution from the construction sector in the second quarter would feel like a bonus for the UK economy, given the sector's prolonged struggle", said Mr Archer.
The UK economy is forecast to grow by 0.9% in 2013, according to the International Monetary Fund.
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Contract on Modernization of Serbian Railways Signed. Directors of the Serbian Railways and the Russian Railways (RZD) signed an annex to the Contract on modernization of the Serbian railways on the section for Belgrade to Pancevo, total value of USD 80 million. The annex envisages construction and electrification of the second railway line to the total length of 15 kilometers. Construction would start in mid-October, upon the completion of the work the section from Belgrade to Pancevo would be a modern double-track electrified railroad with the speed limits of 160 kilometers per hour.
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EBRD to invest USD 60 million in small hydroelectric power plants. Electric Power Industry of Serbia (EPS) signed an agreement with European Bank for Reconstruction and Development (EBRD) regarding investments of USD 60 million for construction of small hydroelectric power plants. The power plants would mostly be built in southeast and southwest Serbia, the regions with the largest water potential. The goal of EPS is to publishing 23 individual tenders for all 23 hydroelectric power plants by the end of 2013.
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Iraq offers projects worth USD 240 million to Serbia: Serbia was offered projects in the construction and communal sector in Iraq worth USD 240 million, according to the Ministry of Construction and Urbanism. After the Serbian delegation visited to Iraq, an invitation has been extended to the Serbian contractor Yugoimport SDPR which is already present in Iraq and which should be the contract holder of all offered projects. Serbian construction company Energoprojekt would be involved in construction of crude oil platforms, while the Serbian Institute of Transportation CIP and the Institute for Roads will carry out other infrastructure projects. Construction sites in Iraq are going to be completely protected. Except for the workers who enter with special passes nobody else will be able to come close to them.
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Free trade agreement with Ukraine by the end of 2013. Serbian Prime Minister Mr Ivica Dacic and Ukrainian President Mr Viktor Yanukovych said that they were expecting that the free trade agreement between the two countries would be synchronized and signed by the end of 2013. At the bilateral business forum in Belgrade, Dacic explained that in the future, the emphasis should be on cooperation in the sector of metallurgy, agriculture, energy, civil engineering, improved transit and delivery of commodities, as well as increased Ukrainian participation in privatization of companies in Serbia.
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