Are investments in Ajman properties governed by RERA and are ESCROW accounts active and/or mandatory in Ajman ?
A reality check for realty boom
By Saifur RahmanBusiness Editor
Published: June 20, 2008, 00:08
Dubai: Lack of coordination between government bodies could threaten the growth of the real estate sector in the Northern Emirates, industry officials cautioned on Thursday.
More than 300 towers are in various stages of development on both sides of the Emirates Road in Ajman, Umm Al Quwain and Ras Al Khaimah that might be completed but will not see "light" years after completion. Some billions of dirhams have been committed by small investors that could go wrong if government authorities do not collaborate to ensure utilities, officials say.
A senior federal government official has accused local governments in the Northern Emirates of "unplanned" developments that could lead to a major crisis relating to power and water supplies, or lack of it.
"The abrupt development in the construction field now seen in Northern Emirates is unplanned," Hassan Abdullah Al Ghasyah, executive director of Supply at the Federal Electricity and Water Authority (Fewa),said in a statement, responding to queries from Gulf News.
"Local government authorities have not coordinated on precise water and power requirement with Fewa. However, according to the Cabinet decision, Fewa is committed to a minimum 8 per cent annual growth in power and water demand." Private sector officials estimate the GDP growth of emirates such as Ajman at 27 per cent and population growth at 18 per cent.
Real estate investors who are lining up to buy freehold homes in Ajman might have to wait for an indefinitie period for utilities, industry sources said.
Saleh Amer Al Katheeri, chairman of High Sky Properties, which launched Triple Towers hosting 1,160 apartments in Ajman, told Gulf News: "Yes, electricity and water supply remain a concern for us. We have been assured by the government of a steady supply. But if there's a shortage, we will use our own generator to power these buildings."
Issues related to utilities have forced the construction of Al Salam City - valued at Dh30 billion - to be postponed. Umm Al Quwain last month accused developers Tameer Holding for ignoring the issue, which has largely been under government control.
Fewa is meeting the current demand by operating its own plants and importing water and power from Abu Dhabi Electricity and Water Authority, Al Ghasyah said. "In the future, the plan is to increase this import," he said.
Despite rising concerns, small-time investors are scrambling for apartments in new "freehold" areas in the Northern Emirates to make a quick profit. Property prices have also been rising fast due to strong demand. Apartment prices in Ajman have jumped to Dh500 per square foot, up from Dh400 in a matter of months, sources said.
Power supply: New plants to be built
Shaikh Abdul Aziz Bin Humaid Bin Rashid Al Nuaimi, chairman of Ajman Planning and Property Department, has openly expressed concern about the city. "I believe infrastructure development in Ajman is not coping with the rapid developments in real estate ... this could cause problems," he said. "The sewage project is delaying the infrastructure development, though we are pushing for its completion to go ahead with the infrastructure development. The Ministry of Energy will also build a new electricity and water plant."