The UAE’s precarious property trapeze
There was little to no movement in Dubai’s villa developments while oversupply continues to erode apartment values, according to a report on Dubai’s property market for Q1 2011.
April 10, 2011 3:39 by Precious de Leon
Residential sale transactions in Dubai saw a natural increase in January and February, according to a report from real estate specialist Cluttons.
The report, which focused on the first quarter of 2011, attributed this increase to a resurgence of available finance for property investments, as mortgage lenders such as Barclays, Standard Chartered and Gulf Finance continue to fight for market share offering competitive terms to credit worthy clients.
These companies are offering mortgage rates for as low as 4.99 percent while banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available.
Projects, once on hold, have now also resumed construction as cheaper build costs allow developers to finish construction. (Not a surprise to Kipp, though, considering that resuming construction would have been a better alternative then having to deal with returning money to investors.)
Although project completion includes the possibility of increasing mortgage defaults down the line for investors whose payments are tied to construction milestones, banks like Gulf Finance have stated intentions to help investors rework their payment schemes without facing criminal charges.
Here are some more topline points from the report:
Residential sales sector – Market Analysis:
• Residential villa units have seen a slowdown in value reduction when compared to Q4 2010, especially in the higher end of the market. Villa developments such as Arabian Ranches, Meadows and Palm Jumeirah have seen little to no movement over the last three months, which bodes well for the recovery.
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