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Sat 23 Jan 2010 11:53 AM

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Dubai debt woes to hurt UAE property industry - Nomura

Real estate recovery unlikely in 2010, property prices set to fall further - analysts.

Dubai’s debt crisis has sapped investor confidence and may hurt the property industry in the UAE this year, analysts at Nomura Holdings said in a report on Friday.

“The Dubai government’s announcement of a Dubai World restructuring and debt standstill agreement has put an end to any likelihood of a real estate recovery in 2010,” newswire Bloomberg quoted Nomura as saying.

Dubai World, one of Dubai’s three main state-owned business groups, said on November 25 that it would seek to delay repaying debt for at least six months, roiling markets in the Middle East and around the world.

The global credit crisis led to a 50 percent decline in property prices in the city and hampered the ability of Dubai-based companies to raise loans and refinance.

House prices in Dubai may fall this year and remain little changed in Abu Dhabi, with the second quarter being the low point for the market in the Gulf state, the Nomura report said.

Dubai may have total debt of as much as $170bn, more than previously estimated, investment bank EFG-Hermes Holding said in a report Jan 19.

The emirate, the second-largest in the UAE has raised $20bn by selling bonds to Abu Dhabi, two state-run banks there and the UAE central bank.

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