Negative equity hits 70% of expat home owners

Study shows 22% UAE expat owners bought off plan, with further instalments to pay.
Negative equity hits 70% of expat home owners
By Joanna Hartley
Mon 06 Apr 2009 07:41 AM

Seven out of 10 expatriates who own a property in the UAE have revealed if they sold it now they would lose money, according to the findings of a new study.

The research by market research firm Real Opinions found that four out of 10 UAE expatriates had bought property in the country, of which 22 percent had bought off-plan and still had further installments to pay.

Of these a quarter said it was unlikely that they would be able to make the next payment – highlighting the importance of job security in the region at present, according to CEO of the research firm, Dan Healy.

However, the findings follow a previous study by the same company that revealed one in four thought it was likely that they would lose their job in the coming 12 months, or had lost their job recently. “Seven in 10 now believe they are in negative equity and this presents unprecedented and unexpected implications for these expatriate owners – it is especially a time for concern given the current finance options in the marketplace and laws relating to bad debts’,” Healy said.

“For those property investors finding themselves in negative equity, job security will be imperative in order to ride out this dip in the market,” he added.

The researchers also asked how long people thought the economic crisis would last – the question was asked in the week running up to the G20 meeting.

Findings show that most UAE expatriates believe it will take 18 months for the country to recover – with most citing November 2010 as the end date.

However, responders did understand that this was a global crisis and the grass might not actually been greener anywhere else, Healy revealed.

“There is still strong loyalty and the belief that the UAE will top the list of countries worldwide that will emerge quickly and economically stronger, matched by Saudi Arabia and followed closely by Qatar,” he said.

The property part of the survey of 465 expatriates working in the UAE was conducted online between March 25 and March 31.

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