Thursday, February 12, 2009

UAE likely to bail out real estate firms: EFG-Hermes

Leading investment bank in the Middle East, EFG-Hermes, yesterday said that UAE plans to bail out real estate companies in the country, and may restrict the flow of new supplies, amidst the slowdown in property sector.

The government is yet to reveal plans for the real estate sector, although it is known that a federal plan is in the agenda, said the Bank.

The real estate index of the Bank, reveal that advertised prices in Dubai have fallen 8percent during the past few months. The transactional prices have fallen by as much as 35 to 50 percent in Downtown Burj Dubai, Dubai Marina and Palm Jumeirah.

The government aims to restrict the number of housing units coming on stream. According to the Bank, the number of housing units to be released this year will be less than half of the original forecast of 70,000 units.

Last week, Morgan Stanley, the global financial services firm, said that property prices have fallen by an average of 25 percent, since its peak in September last year, and that about $263bn worth of projects have been either delayed or cancelled in UAE.

More than 50 percent of construction projects in the UAE, constituting a total of $582bn worth projects, are currently suspended, revealed ProLeads, the Dubai-based research firm, last week.
The once-booming property sector in Dubai, have been hit hard during recent months, by the fall in property prices, job redundancies, or projects being scaled back by the developers.

1 comment:

sunil said...

unlike the USA, if dubai pulled this move things would not be so much different than they currently are. this behavior is expected from the dubai government. USA is experiecing a move from democracy (capitalism) to socialism. it will be interesting to see where it ends up and its similarities and differences with a place like dubai