Mortgage lending in the UAE grew 25 pc in Q2 2009, according to HSBC. Has the property market finally bottomed out?
The results are in.
August 30, 2009 12:22 by Dana El Baltaji
Ever since the Dubai real estate market crashed in September 2008, property investors have been waiting for news of a recovery. It’s been almost a year of price drops and sagas, all of which compounded the panic investors suffered since the crisis crippled the property market.
Naturally, investors are looking for glimmers of hope; in August, they received a glimmer, albeit a dim one: HSBC published a report recently on the lending market, claiming that mortgage lending in the UAE rose by 25 percent in the second quarter of 2009 compared with the same period in 2008.
“The growth in Q2 over Q1 is more than 25 percent. As price expectations between sellers and buyers are converging, there are more transactions happening both for property sales and mortgages,” said Venkatesh Srikantan, regional head of Assets and Liabilities, HSBC Middle East.
“There is an increase in demand especially from end-users who missed the earlier property booms and are now happy to purchase property at these price levels,” Srikantan added.
Kipp asked our readers if HSBC’s findings suggested that property prices had finally bottomed out, and the answers were varied. The majority of respondents – 50 percent – said that property prices are likely to fall further in 2009, while 24 percent of our readers claim that it’s too early to tell if the market has bottomed out.
Meanwhile, only 14 percent said that the rise in mortgage lending in the second quarter is an indication that prices had finally hit the price floor.
And finally, an astonishing 12 percent of respondents asked “whose bottom is out?” We’d also like to know. If you see the bottom in question, take a cheeky photo and send it to Kipp (editorial [at] kippreport.com).