Dubai real estate suffers as distressed sales rise
The once-booming real estate sector of the emirate is showing signs of collapsing due to the global credit crisis, as prices fall sharply and buyers struggle to get mortgage loans.
”There is a sizeable increase in the number of property owners in an urgent state to sell,” Robert Macnair, sales director of Dubai-based Elysian Real Estate, told Reuters on Thursday.
and the article goes on to conclude :
Global Property Guide cut its long-term investment rating on Dubai residential property on Wednesday from neutral to negative due to the drop in gross rental yields from last year.
”Gross yields are now an average of 5.5 percent, significantly down from an average of 7.5 percent a year ago … At these levels, Dubai is less attractive than it was previously as an investment property,” it said in a research note.
Global Property Guide said Dubai has “an enormous” amount of new supply and expects prices to fall over the next 2-3 years.
To compound matters, Dubai Islamic mortgage lender Amlak AMLK.DU said on Wednesday it suspended new loans. This follows moves by several banks to tighten lending conditions in August and September.
”It is very hard to get loans now. Customers are suffering,” Rehab Gouda, senior sales agent at Al Jabal Real Estate told Reuters.
Check out the full story about Dubai’s fall from grace.
