A UAE property developer says that speculators are still “driving” the market. Another great press release euphemism that, but it’s pretty hard to swear in writing nowadays with Orwellian firewalls censoring our every blasphemy.
Speculators were originally responsible for driving property prices to unrealistic levels," said Mohammed Nimer, CEO of mid market property development company MAG Group Properties. “Now although they are on the receiving end of the slump in prices, they are still blighting the real estate landscape by panic selling and undercutting the fair market price."
“Unfortunately it looks like we are still waiting for them to finally exit the market. What is of primary importance is that we limit the damage they have done, learn from our mistakes and take responsibility for our own actions,” Nimer added.
According to Nimer, banks are reluctant to lend because prices are still falling and it is difficult for them to ‘feel the bottom’. “That’s why we are experiencing loan-to-value (LTV) ratios of 75% – they are calculating the risk.”
While this might not be good news for developers and investors, it is good news for jobseekers who are contemplating job offers in the UAE.
At Spinnaker we have noticed a definite cooling of people’s interest in working in the UAE in recent years because of the cost of housing.
“Jobseekers have become very canny,” said Lyn Sutters a consultant at Spinnaker who focuses on the Middle East. “They are fully aware of the cost of housing and many had become reluctant to risk accepting jobs that came with no protection against rising housing costs.”
With the protection of a government cap on annual rent increases, 2009 may well therefore present the best opportunity for some years to secure accommodation in the UAE at reasonable rental levels and to avoid eating into that juicy tax-free salary to supplement an insufficient housing allowance.
(For the latest on Riyadh’s property market see http://www.eqarat.com/newsletter1/309/5.htm.)