Over the last week, Dubai has seen announcements that could have wide-ranging ramifications for the Dubai property market. Most important has been the unveiling of a proposal to bail out Nakheel - the once resplendent developer that has fallen to pieces. The importance of this company has been underestimated: Not only is it associated strongly with the brand of Dubai but it has received billions of dirhams from home buyers for buildings it has yet to delivered and it owes contractors other billions of dirhams.
In the words of Aiden Birkett, the chief restructuring officer of Dubai World: "If you fix Nakheel, you fix the real estate sector, and you go a long way to fixing the Dubai economy."
This may seem like an overly broad statement, but when you consider that Dubai Government-controlled property developers control 70 per cent of the market (and that Nakheel is a huge part of this), it begins to make sense. Suq al Mal, one of the region's best business blogs, points out that Nakheel had Dh27.9 billion of liabilities in its last earnings statement - which comprises pre-payment from home buyers. That is a massive amount of money and the Government has rightfully stepped in to preserve the investments of these people, as well as the contractors who are owed by Nakheel.
After months of planning and internal restructuring, we are starting to see the first rays of transparency from Nakheel. Home buyers and contractors will take great comfort in actions like the letter sent out last week that explained the outlines of its plan to repair the company.