The world’s financial system may be reeling from a crisis sparked by bad home loans, but developers in the oil-fired Gulf remain confident Dubai’s explosive housing market still has plenty of pep left.
Taxis and rental cars continued to snarl traffic even more than usual Wednesday in Dubai’s financial district as visitors flocked to the CityScape real estate exposition, which runs through Thursday. Organizers said visitor numbers in the first two days of the four-day show nearly matched the entire attendance of last year’s three-day expo.
The annual event is a place for developers to unveil their latest creations — each seemingly more audacious than the next — and vie for the attention of real estate brokers and would-be buyers.
« The mood is upbeat as always, » said Robert Troup, managing director of architecture firm Aedas. « There’s a lot of confidence in the region. Both Abu Dhabi and Dubai have development plans in place and they’ll see those plans through. »
The festive feeling stood in stark contrast to the glum economic currents coursing through much of the world’s financial system — even though stocks in Dubai and elsewhere in the Middle East fell again Wednesday along with markets around the world.
Few builders expressed concern that the credit turmoil and global slowdown would choke Dubai’s roaring property growth, one of the key economic drivers in the tiny but booming emirate. The expo’s official paper summed up the prevailing optimism with a front-page headline: « No sign of a slowdown. »
Some industry insiders even predicted the financial pain elsewhere could be a boon to the region. « The bad market situation in the U.S. and Europe will bring even more investors to this part of the world, » said Mohammad Khazami, general manager of the Dubai branch of Doha, Qatar-based developer Al Madar. « You are living in a region full of children and full of money… And those people are ready to spend. »
Source: The Associated Press – The International Herald Tribune, October 8, 2008
Dubai’s mortgage companies will finance genuine home buyers, rather than speculative buyers
The global liquidity crisis had not affected Tamweel, the Dubai-based Islamic mortgage company. Nabil Abou Alwan, group head of marketing and product development at Tamweel, stated « we continue to finance home-buyers and serve our customers as before ». He said the company had been absorbing the increasing cost of financing without passing it on to customers.
Meanwhile, Alwan said the mortgage firm was trying to be prudent with its resources to finance more genuine home buyers, rather than speculative buyers. « Given the current credit crunch, Tamweel has ended a promotional offer of up to 90 per cent home financing and was increasing its equity requirements by reverting to its original 80 per cent scheme. The move will boost our capacity to finance end-users who are willing to put up more equity ».
Amlak Finance PJSC, another Dubai-based Islamic mortgage giant, which is holding merger talks with Tamweel, said it had not changed its financing policy and continued to offer up to 90 per cent financing. « We are basing our finance-to-value ratio according to each project and the evaluation of the developer. Hence, we are selective in our financing criteria, » said Arif Alharmi, chief executive officer, Amlak Finance. « It is also worth mentioning that we launched today Al Waha projects with up to 90 per cent financing, » Alharmi said. Source: Issac John, Khaleej Times, October 10, 2008
Property buyers in the UAE should purchase apartments from major developers if they want to benefit despite a slowdown in price appreciation. The major developers are standing on solid ground and this could provide much-needed comfort to end-users who have been putting their life savings into the UAE’s properties.
Projects developed by major developers such as Emaar, Nakheel, DAMAC, Dubai Properties, Aldar, Sorouh and Hydra will continue to appreciate. So end-users have nothing to lose or worry, even if the market corrects itself. Investors shouldn’t look for short-term gains, but rather look for long-term real value.