In the midst of slowing market conditions in the Emirate of Dubai, government spending cuts and continued oil price decline, a high number of property development projects in the UAE won’t be completed as per schedule. It is estimated that some 18,200 residential units in Dubai won’t be delivered as originally anticipated due to several of factors. This number represents 70 per cent of the 26,000 units planned for completion in 2016. These figures relate to Dubai and not Abu Dhabi, but the two markets are expected to be relatively similar. In the recent years, Several affordable, middle-end and luxury property projects were launched in Dubai, including Jumeirah Village Circle (JVC), Dubai Marina and Palm Jumeirah. Some of these projects were supposed to deliver about 26,000 apartments, more than 7,000 villas and townhouses and 1.1 million square metres of office space in 2016. Project delays were attributed to financing issues, contractual disputes, construction delays and governmental licensing delays. Some developers also delay completions to avoid flooding the market, while cautious investors have avoided off-plan properties. Over the past five years, the completion rate of proposed projects has been relatively low, with only 30 per cent of residential projects and 45 per cent of office space completing on schedule. However project delays are quite common in Dubai’s real estate market. The delivery of certain projects has suffered delays due to optimistic completion dates and poor project management. Some developers fail to take into consideration approval requirements and the time required for these approvals. Some off-plan projects have witnessed a slowdown in investor appetite, which has resulted in shortage in cash flow. This is the reason why several developers have introduced lately attractive payment plans beyond handover dates.
