Panic over for UAE real estate market - Rakeen

The panic in the GCC real estate market is now over and all the ingredients are there for a recovery, the managing director of Ras al Khaimah master developer Rakeen has predicted.

Ghassan Youssef said the main challenges for the sector in the fourth quarter were the lack of end-user mortgages and project financing as well as re-establishing investors’ and the public’s trust in property.

"The panic is over. The industry has become realistic, adequately cautious and justifiably optimistic. The region has all the ingredients to recover to a reasonable status, not to unrealistic prices and the market that the flippers created," he said in an interview with the organisers of Cityscape Dubai.

Last month, Rakeen was named judicial custodian of Khoie Properties, troubled developer of the emirate’s $800m La Hoya Bay project.

Asked what lessons the industry should learn from the downturn in the sector, Youssef added: "Not to take success and growth for granted and guaranteed without limits; to have sound strategies in place to weather storms...we need to keep the bigger picture in mind for a healthy growth and sustainable future of this country."

He said that government legislation was needed to make banks provide adequate mortgage facilities at affordable rates, provided the applicant can prove they can guarantee payments.

In comments to Construction Week Online, Youssef added that Rakeen would continue to look for opportunities to invest overseas to add to their current projects in Congo, Georgia, Iran, Kyrgyzstan, India and Lebanon.

“Industry and increasing GDP are still driving demand for real estate – it’s not a place that was fashionable or over-hyped. We’ll continue to look at development opportunities internationally but they must all cater to a need,” he said.

Although acknowledging that the financial climate had changed, Youssef insisted that Rakeen would continue to launch new projects but at a slower rate than previously and “as necessity demands”.