The agency notes that the Dubai housing market, known for its real estate construction projects on artificial islands, is going through hard times. Before the global financial crisis, the market had been growing for five years: housing prices quadrupled. However, from September to the end of January, housing prices in Dubai fell by 25%, and in Abu Dhabi by 20%. The UAE mortgage lending market has also suffered from the financial crisis.
The largest construction companies in the country are experiencing difficulties, particularly due to unpaid bills from the UAE government. For example, the debt owed to Arabtec Holding, the largest development company in Dubai and the main executor of government construction orders, amounted to $1.36 billion at the end of last year. The state also has debts to Emaar Properties, which is the developer of the Burj Dubai complex, which is intended to become the tallest building on the planet.
The agency notes that amid the crisis in the tourism and financial sectors in the Persian Gulf, UAE construction companies may be the first candidates for state financial aid in the amount of $10 billion. According to the developers themselves, funds from the government have already begun to arrive in their accounts.
As Lenta.ru notes, earlier the Gulfnews newspaper reported that stabilization of real estate prices in Dubai will begin in 2011, but the first signs of improvement in the market will appear already in 2010. According to the publication, at present, the implementation of most major projects started by developers in the UAE has been suspended. Many potential buyers and investors have taken a wait-and-see position. Banks have stopped both issuing loans to construction companies and mortgage lending to ordinary citizens.
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