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Will real estate recover? Outlook is… better
Mortgage holders might not end up in court, Lloyds is back in a lending mood, and one bank says everything is going to be just fine and dandy.
January 11, 2011 3:17 by Eva Fernandes
Kipp rarely feels sympathetic, but when we think about the mess that is the UAE real Estate market we find a possible exception to the rule. Though the industry has been in general decline for some time, the last few months have been particularly difficult with major players like Aldar ’fessing up to some serious debt, just when we thought we’d already hit rock bottom. That’s why a new industry report spotted by Kipp on Emirates 24|7 is welcome – it will be the source of much optimism and hope for those in the troubled industry.
In its report Bahrain-based Taib Bank said the UAE real estate sector is to grow at an annual rate of 4-6 percent until 2015. Strong “government supportive measures and economic fundamentals” will help the UAE real estate industry to be one of the first sectors to recover in the Gulf region, apparently. The construction of the Dh40 billion Emirates Railway network and the Dh74 billion nuclear power plant are at the top of the investment projects that are supposed to provide a real push to the sector.
In addition to those upcoming infrastructure projects, the increasing population of the UAE will contribute to an increase in housing and infrastructure demand. All in all, Taib analysts are confident of the country’s recovery: “Although the recent Dubai World debt crisis led to panic selling among investors, we are optimistic about long-term growth based on buoyant fundamentals (…) Going forward, we believe the global economic recovery, improving risk appetite, and normalising liquidity scenario will be key factors driving the UAE’s real estate sector dynamics.”
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