Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Print
Email
Discuss this article (3 Comments)Tamweel chief urges action on property lending
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 30 March 2009
LIQUIDITY CALL: The chairman of Tamweel has urged action to get banks lending again to boost the property market.
The chairman of the UAE second largest lender has called on the government to add liquidity to the property financing market.
Sheikh Khaled bin Zayed, chairman of Tamweel, said urgent action was needed to arrest the dramatic fall in property prices which was bringing “huge losses” to investors.
“Unless we bring in financing for the real estate sector, I do not think the economy can be revived,” Sheikh Khaled said in comments published by UAE daily The National on Monday.
“The Government has to intervene and provide funding for banks to come back and lend,” he told the paper.
Tamweel and Amlak Finance are awaiting a decision about their future. The two were to merge but officials have said that is just one option open and a final decision will be taken soon.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Support a value
Posted by AR, London, UK on Tuesday 31 March 2009 at 11:22 UAE time
Why not let RERA value each property and then the government of Dubai undertake to purchase any property whatsoever for a percentage of that price. Maybe this percentage needs to be 50% or 70% but, whatever, it must be low enough to take properties off the market at close to original costs, not with massive profits.
That will allow a lot of people to get out of the market with only minor scalding, not 3rd degree burns and put a visible floor under prices.
When things pick up then the saleable properties can be offloaded again slowly and others used for social housing projects.
Caution needs to be taken to ensure that the valuations are fair in the first place and not inflated by vested interests and that future sales are equally fair and open, preferably by public auction.
These auctions would also have the effect in the future of allowing the public to better assess the actual value of other properties in the market.
Financing could come through bonds sold to GCC investors or governments.
Posted by AR, London, UK on Tuesday 31 March 2009 at 11:22 UAE time
Why not let RERA value each property and then the government of Dubai undertake to purchase any property whatsoever for a percentage of that price. Maybe this percentage needs to be 50% or 70% but, whatever, it must be low enough to take properties off the market at close to original costs, not with massive profits.
That will allow a lot of people to get out of the market with only minor scalding, not 3rd degree burns and put a visible floor under prices.
When things pick up then the saleable properties can be offloaded again slowly and others used for social housing projects.
Caution needs to be taken to ensure that the valuations are fair in the first place and not inflated by vested interests and that future sales are equally fair and open, preferably by public auction.
These auctions would also have the effect in the future of allowing the public to better assess the actual value of other properties in the market.
Financing could come through bonds sold to GCC investors or governments.
More transparency ...
Posted by Geriant, Dubai, UAE on Monday 30 March 2009 at 16:31 UAE time
Thank you Sheikh Khaled, for saying out loud what should have been said six months ago. Without liquidity the property market in the UAE is doomed to wash into the sea like The Palm fronds have have started to do. However, protecting investors is not the only reason for injecting money. The world is watching to see how long it takes for the UAE, and Dubai in particular, to come clean on how deep the disaster really is. Restoring trust is of paramount importance, and words of candour like this will go a long way to reassure the wary.
Posted by Geriant, Dubai, UAE on Monday 30 March 2009 at 16:31 UAE time
Thank you Sheikh Khaled, for saying out loud what should have been said six months ago. Without liquidity the property market in the UAE is doomed to wash into the sea like The Palm fronds have have started to do. However, protecting investors is not the only reason for injecting money. The world is watching to see how long it takes for the UAE, and Dubai in particular, to come clean on how deep the disaster really is. Restoring trust is of paramount importance, and words of candour like this will go a long way to reassure the wary.
A clear picture needed prior to be able to restore confidence
Posted by Tristan de Ferluc, Abu Dhabi, UAE on Monday 30 March 2009 at 11:48 UAE time
The point is not for the state to stop prices falling down and encourage lending to carry on like before with the foreseen impact of artificially sustaining the market. It is important to work on the causes and their potential disastrous impacts, not only on the effects. The first point is clearly to define a policy and an appropriate action which will avert any systematic risk of default, and this, on the current portfolio. It seems to be what the Government is working on.
In fact, the problem resides will all actors of the real estate market, all of them owing money to one or the other. The target is therefore to stop the vicious circle which could lead defaulting actors to drag down other actors with them and overall, the market. Getting a clear picture of the situation is not that easy which clearly explains the time taken to date. Once this is clarified and actions are put in place, once the market gets more comfortable with where it really stands, then it will naturally stabilize – offer and demand – thus the prices and lending will resume as well.
At the end of the day, for the new business, housing companies have to review operating and risk models to make sure they will contribute to stabilize the market and will create the conditions of a sustainable development.
Posted by Tristan de Ferluc, Abu Dhabi, UAE on Monday 30 March 2009 at 11:48 UAE time
The point is not for the state to stop prices falling down and encourage lending to carry on like before with the foreseen impact of artificially sustaining the market. It is important to work on the causes and their potential disastrous impacts, not only on the effects. The first point is clearly to define a policy and an appropriate action which will avert any systematic risk of default, and this, on the current portfolio. It seems to be what the Government is working on.
In fact, the problem resides will all actors of the real estate market, all of them owing money to one or the other. The target is therefore to stop the vicious circle which could lead defaulting actors to drag down other actors with them and overall, the market. Getting a clear picture of the situation is not that easy which clearly explains the time taken to date. Once this is clarified and actions are put in place, once the market gets more comfortable with where it really stands, then it will naturally stabilize – offer and demand – thus the prices and lending will resume as well.
At the end of the day, for the new business, housing companies have to review operating and risk models to make sure they will contribute to stabilize the market and will create the conditions of a sustainable development.
Click here to post a comment
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST BANKING & FINANCE
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST BANKING & FINANCE
LATEST MIDDLE EAST BUSINESS NEWS
- Banking & Finance: Qatar's sovereign fund may invest $30bn in 2010
- Transportation: BA cancels Dubai and Bahrain flights
- Media & Marketing: Emirati author to publish kindergarten 'sex ed' book
- Politics & Economics: Saudi GDP to grow 3.8% in 2010 – Jadwa Investment
- Transportation: Dubai sees 22% rise in air passengers in Feb
SHARE PRICE CHECK
RELATED STORIES
Tamweel PJSC
| 98 stories- Tamweel set to seek shares trading resumption
21 Feb '10 | News - Dubai's Tamweel swings to profit in Q4
8 Feb '10 | News - Tamweel says Amlak merger still possible in Q1
27 Jan '10 | News
Mobile
