Developers turning to government housing projectsby Elizabeth Broomhall on May 18, 2010
UAE developers are turning to government-led housing initiatives in order to compensate for a decline in public spending and a decrease in demand for new projects.
Sorouh Real Estate, Aldar Properties and Colliers International are among some of the biggest industry players whose latest strategic business plan involves a focus on residential housing schemes in order to maintain competitive advantage and improve cashflow.
With a number of projects on the cards in Abu Dhabi due to a massive undersupply of housing for UAE nationals in capital, the contractors are hoping to increase their government-backed projects by as much as 50%.
Colliers’s regional director Ian Albert told Reuters that the projects were "a good thing” because they allowed the developer to “maintain its market share and capabilities", and estimated a possible undersupply of 42,000 homes in Abu Dhabi by 2013.
Equally positive were executives at Aldar and Sorouh, though they continued to expect challenges in the year ahead, wary of Abu Dhabi’s property market where house prices were down 10% in April despite faring relatively well during the recession.
A real estate and construction analyst at UBS told Reuters that the government projects were “a lifeline” for contractors during difficult economic times.
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