Worldwide economic downturn brings with it the expectation of mergers and acquisitions, unpredictable pricing in the realms of the sales and rent markets and cautious lending, in a bid to reach a (supposedly) smooth road to market and economic recovery.
The global financial crisis has hit Dubai particularly hard and Dubai’s property bubble has burst in a big way. Banks and property companies are renegotiating or defaulting on contracts left and right. The lawsuits are already starting to fly according to Reuters news agency.
A well-respected Kuwait-based investment bank has said that the outlook for the UAE real estate market remains negative.
Kuwait Financial Centre, also known as Markaz, said in a report that oversupply in the property market would likely constrain demand and impede economic growth. Markaz said it expects the UAE’s real gross domestic product to grow this year by 0.7 per cent, down from 5.8 per cent in 2008.
Thinking of buying an investment property in Dubai? Wait and see is our best advice right now. The credit crunch is having a big impact in the UAE, and particularly in Dubai, where many ex-pats went to work in the construction and real estate sector, only to discover they had 30 days to find another job or get out of the country when their job vanished along with the rest of the credit market.
Dubai/UAE
Prices for residential property in Dubai are expected to fall another 50% in 2009, according to Landmark, although they have faith that the high end of the market will drop a little less in value. Download report.
A recent initiative by the Indian government to prop up property developers by allowing banks to restructure and extend loans is backfiring and turning into another fiasco. Last December, the Reserve Bank of India (RBI) relaxed a key rule on restructuring bank loans to the real estate sector as a one-time measure to help Indian real estate developers cope with falling demand and a credit crunch.
Speculation that accounting practices in the Indian real estate sector are suspect is running high at the moment, causing many (myself included) to wonder just how far the sector is going to crash and how many frauds are going to come to light. Senior board members of no less than six top real estate companies have resigned unexpectedly in the past few months, in much the same way rats leave a sinking ship.
On December 28th, The Kuwait Petroleum Corporation withdrew from an agreement to create a $17bn petrochemical joint venture with Dow Chemical of the US. The move follows a reversal of approval from the country’s Supreme Petroleum Council. Kuwait’s state-owned energy group was to pay $9bn for half of Dow ’s basic chemicals business in a deal struck a year ago. On December 1 2008, KPC renegotiated the price downwards by $2bn.
More on Kuwait in Turmoil as Dow Chemical Deal Cancelled to Prop up Domestic Housing Market
Small property investors will be facing an enormous dilemma in the coming years. Who to trust for advice. Very few of the institutions saw the housing bubble coming, and the few that did, mentioned “a small correction, perhaps single digits.”
The value of real estate in Romania – malls, office buildings, houses and land – has declined by an average 30-35 percent since January, after a sound 15 percent annual increase since 2004, according to Colliers International consulting company Managing Partner, Bogdan Georgescu. According to the company,the depreciation is caused by the global financial crisis, which has sharply affected the local Real estate sector, making investors think twice before acquiring a property.
More on Romanian Property Prices have fallen 30 percent this year
