During the past two week, with the start of the business season in the Gulf region, new real estate projects and property financial deals more often make the headlines in Dubai. The most recent slump of the Dubai stock market by 13 percent, mostly driven by selling pressure on real estate shares, has not kept “corporate Dubai” from announcing new deals. It seems, the forward looking or discounting mechanism called stock market which reacts three to six months ahead of the economy and the shift of global investors’ focus from emerging markets, still have no impact on Dubai property developers plans.
Earlier on Sunday, Damac Properties, the non-listed, privately-held developer in Dubai, said it awarded a 1 billion Dirham (272 million U.S. dollars) deal to Turkish construction firm TAV Tepe Akfen to build the Damac Towers Paramount in Business Bay. The Paramount twin towers, which will host luxury apartments as well as a 5-star hotel, are planned to be 250 meters tall each.
The 110 acres Dubai International Financial Center (DIFC) district will welcome a 48-storey high Central Park tower comprising of 426 flats. The development will be built by Dubai Properties, which is part of the government conglomerate Dubai Holding.
In addition, the Dubai Roads and Transport Authority (RTA) announced the expansion of the current Dubai Metro track through two extensions of the red line and the green line. The original red line was opened on September 9 2009 and goes from the Dubai International Airport’s terminal 3 until the free port Jebel Ali,but now will be extended to the residential district of Mirdiff. The green line will connect Dubai Academic City with the old town of Deira, the RTA announced.
Property experts and analysts express doubts about the sustainability of the current rise of the Dubai property prices. The availability of unoccupied residential and commercial units across the city remains high, while going rents and property prices rose by somewhere from 20% to 40% on annual basis. Coupled with a significant increase in consumer prices of products and services, high rents and property prices are not seen as favorable for the development of strong economy.
