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Summer delays forecast for $80bn property projects

The UAE property market could see the delay of $80bn worth of projects scheduled for completion this summer, according to a Kuwait-based investment bank.

In a report issued on Friday, Kuwait Financial Centre, Markaz, said the country would see real GDP grow by just 0.7 percent this year, down from 5.8 percent in 2008.
The real estate sector was the key factor in this slowdown, with an oversupply of property and constrained demand, according to a report in UAE daily Khaleej Times.

The reluctance of banks to lend due to the lack of confidence in the industry had also removed the necessary lubricants in the system, and pushed the region into deeper negative growth, Markaz said in its outlook for the second quarter of 2009.

In an earlert report in March Markaz revealed that the UAE accounted for 91 percent of all real estate and construction projects that had been either put on hold or cancelled in the GCC.

“The persistent uncertainties in demand expectations, especially in Dubai, would continue to haunt the real estate sector," its latest report said.

“Though some banks have offered renewed mortgage lending, the extent of takers for such loans is questionable given the huge uncertainty in demand prospects, especially in Dubai," it added.

The outlook for the GCC real estate sector as a whole remained negative, due to weak demand and abundant supply, said Markaz, which is one of the Arab Gulf region's leading asset management and investment banking institutions.

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