Mortgage Lending Revives In DubaiWednesday, April 29, 2009
Home prices in Dubai have eased since their peak in August 2008, a commercial-property broker said yesterday in a report. The decline from the first quarter of 2008 was 34 per cent. Dubai house prices fell 41 per cent in the first quarter from December after banks reduced lending and speculators left the market because of the global financial crisis, Colliers International said. Economic growth in Dubai eased after the worst financial crisis since the 1930s hurt its property, financial services and tourism industries. That caused companies to revamp, which in turn has curbed demand for real estate. Potential homebuyers are "concerned about job security and therefore unwilling to enter the market, even if finance is available to them," John Davis, chief executive officer of Colliers International, said in the statement. Dubai's property prices quadrupled in the five years to September 2008, helped by new laws allowing foreigners to own property and a growing expatriate workforce. Falling property prices now raise the prospect of rising loan defaults. The average price of a residential property fell to Dh1,037 ($282) a square foot at the end of the first quarter from Dh1,770 three months earlier, Colliers said. Prices for apartments and townhouses dropped 42 per cent, while the cost of buying a villa declined 40 per cent. Mortgage lending is starting to revive in the emirate," Davis said in an interview. "A limited number of financial institutions have come back into the market," he said. The Colliers survey was based on data from lenders accounting for 60 per cent of Dubai's mortgage market.
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