June 12 (Bloomberg) -- Dubai, the Persian Gulf business hub where real estate values have fallen for three years, has cancelled 217 property projects in a two-year review of the industry.
Out of more than 450 projects reviewed by the Real Estate Regulatory Agency, 237 will be completed, according to a Dubai government bond prospectus that didn’t name the cancelled developments. The value of property transactions fell to 119.5 billion dirhams ($32.5 billion) in 2010 from 152.9 billion dirhams a year earlier, the document said.
Residential property prices in Dubai declined 1.2 percent in May as the market failed to benefit from political turmoil in other parts of the region, Deutsche Bank AG said last week. Home prices have dropped 64 percent from their peak in mid-2008, after the financial crisis ended a speculation-fueled boom and construction outstripped demand.
The number of mortgage transactions dropped to 9,548 in 2010 from 9,859 the previous year, according to the prospectus.
The property market’s share of the Dubai economy shrank to 13.7 percent in 2010 from 14.4 percent the year before. Construction fell to 9.4 percent of gross domestic product, from 11.2 percent in 2009, according to the document.
The Dubai Financial Market Real Estate Index was down 1 percent at 11:41 a.m. in Dubai. The measure declined 11 percent this year has slumped 73 percent since mid-2008.
Dubai has 455 registered property developers and the largest are wholly or partially owned by the government or ruling family, according to the prospectus. The city had 893 registered real estate brokers at the end of May.
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