Despite gloomy global economic scenario, there is still a plan to spend US$60 billion (Dh220bn) this year on buildings under construction in the UAE, according to an independent project tracking company. "The market is still going to grow till next year," said Emil Rademeyer, Director at Proleads, in an interview with Emirates Business.
"If you look at the buildings under construction, there is still a plan to spend $60bn. Next year the guesstimated forecast stands anywhere between $100bn and $130bn."
Market reports indicate that projects have been stalled, he said. "Looking at the available market numbers, not a single tender will be placed for the next 12 to 18 months," said Rademeyer.
"Nevertheless, this is still a growing market. It has doubled from last year and there is potential to still grow in the next year. That is tremendous given the current global situation. If you go anywhere in the world, the construction market is declining. So though people are getting sidetracked by the gloom and doom stories, it has to be brought to the forefront that the UAE market is still growing."
It is also a good time for developers to reassess their bets and do a second round of tenders to benefit from the fall in commodity prices, he said. "If you look at the trends in commodities, you will notice that steel is now a third of its price six months ago," he said. "This means that developers now have an opportunity to revaluate their bets. Maybe, it is worthwhile to do a second round of tendering because prices have come down significantly. Everybody is worried and everybody is nervous but it is not bad from the construction point of view."
He said some speculation about delay in projects are not realistic. The delay in Palm Deira happens because it does not take into account the actual construction aspects of the project. "For the next two to three years, all the work at Palm Deira will focus on dredging," said Rademeyer. "The developer said it will also focus construction on the area near Deira but that was planned anyway."