The latest industry market report indicates that property prices continue to surge – up 42% over the past year. The usual factors driving prices are in evidence – political stability, buoyant local economy, growing demand, 2020 Expo etc. However such steep climbs may well be a precursor of another asset bubble, similar to what happened in 2008.
One of the drawbacks of this current property boom is the increase in the number of cold-calls from brokers and agents. As a result, the Real Estate Regulatory Agency (RERA) has notified all concerned parties that such direct telemarketing tactics are against its 2006 regulation 85 which could lead to fines for offenders.
The government is planning to spend US$ 545 million in building a canal that will link Business Bay to the Arabian Gulf. The 3km waterway will have to cross Sheikh Zayed Road, around Safa Park, as well as Al Wasl and Jumeirah Beach roads and will be completed by 2017. It will cover 80k sq mt and will use a bridge – that could be based on the Falkirk Wheel in Scotland – to straddle SZR.
The oldest shopping mall in Dubai – Al Ghurair – has finally completed its first phase of a US$ 545 million revamp. Its retail expansion has 130 new shops and 350 other outlets covering 850k sq ft.
Habtoor Leighton Group has been awarded a US$ 75 million contract to build the next phase of the JAFZA One convention centre complex, as work restarted on the stalled US$ 518 million project. The contract will cover the interior fit-out of one of the twin commercial towers which is part of the development that will include a hotel and associated exhibition and recreational facilities.
A reflection of Dubai’s economic upturn saw a 15.3% rise in the number of new licenses issued by the Department of Economic Development with an August total of 1,148. There were also increases in issued trade names (up by 27.2% to 4,840) and initial approvals by 23.3% to 1,629 during the month.
It is estimated that the UAE has plans, totalling US$ 58 billion, for future expenditure on its roads and bridges. With that amount of investment, it is no wonder that, according to the latest Travel and Tourism Competitiveness Report, the country ranks second in the world for roads quality. Shame about the driving!
In a move to encourage more budget hotels, newly built properties, in the 3-4 star brackets, will be granted a concession on the current 10% municipality fee. The waiver of the levy, charged on the nightly room rate, will be for a four year period.
Ducab and Abu Dhabi’s Senaat have formed a JV to build a 50k tpa aluminium rod mill. The new entity, Ducab Aluminium, will manufacture Electrical Conductive grade aluminium rods with the project slated to cost US$ 60.0 million and will be located in the Khalifa Industrial Zone.
An initial agreement has been signed between the Dubai Supreme Council of Energy and the China Sonangol Group to build a crude oil refinery in the emirate. This is seen as a necessary move as Dubai‘s energy requirements continue to grow in line with its booming economy.
The Dubai Financial Market witnessed a mesmeric Q3 gain of 24.2% closing at 2762, following a Q2 increase of 21.5%. Thursday’s closing bell saw the market at 2823 – a 3.1% jump on the Sunday opening of 2737 and 81.99% up for the year to date. Bellwether stocks, Emaar and Arabtec, were higher closing on US$ 1.64 and US$ 0.73 respectively.
There is speculation that the Dubai and Abu Dhabi bourses are discussing a possible merger, a move that would attract more foreign investment. On Wednesday, the share value of Dubai Financial Market was 15% limit up – a sure indicator that this on-off deal is back on the table.
A long awaited, but welcome, move by the local banks sees the first phase of the introduction of a direct debit scheme being implemented from 05 October. Initially, all post-dated cheques will be transferred to the new system and then all loan repayments will be gradually phased in, followed by payments such as DEWA, insurance, credit cards, telecoms etc.
Hot on the heels of HSBC, it seems that troubled British bank, Barclays, has begun to cull their retail accounts in Dubai. It appears that both banks have had communication problems with customers, some of whom have claimed lack of information and notification. Confirming recent reports, it is no surprise to see Barclays plc decide to move out of retail banking in Dubai to concentrate on its core business of investment and corporate banking.
With UK Chancellor hinting that the country will be in austerity until 2020, German and Spanish September jobless figures rising and Berlusconi trying to topple the Italian government yet again, it is little wonder that the ECB president, Mario Draghi, thinks that European economic recovery is ‘weak, fragile and uneven’. Unemployment in the eurozone is at 19.2 million with Austria the country with the least unemployment at 4.9% and Greece at the other end of the scale with 27.9%. Even more disturbing is the fact that the total EU number of those aged under 25, not working, now stands at 23.7%.
The last thing the US economy needed was an impasse that saw 800k public workers forced to stay at home. It will further damage an already fragile domestic economy, with below 2% growth expected this year, and have serious repercussions across the globe, if the shutdown is prolonged, there will be widespread economic collateral damage that will result in a major global recession. Furthermore, it may be interesting to see China’s reaction to a weaker dollar and a stronger yuan.
Monday was the first day that the US government went into shutdown after Congress failed to approve next year’s funding. Nothing new as this is the 18th time in the past thirty-five years that this has happened. Once again – Here We Go Round The Mulberry Bush.