Local real estate revives as UAE market spirals down: The News

Wednesday, November 12, 2008
By Faryal Najeeb

KARACHI: As property markets in the United Arab Emirates (UAE) face a critical slump, local investors are turning away from the Arab country and are starting to look towards Pakistan, Malaysia and Turkey. Experts in the field say all the investment money that had flown out of the country towards Dubai and other emirates is now coming back. “Ajman is completely dead, whereas Dubai, which had 13 per cent of Pakistani investors’ money in the real estate sector, is left grappling with eight per cent,” stated Munir Sultan, Senior Vice-Chairman of the Federation of Pakistan Chambers of Commerce and Industry Sub-committee on Housing and Construction.

“The UAE has injected about $40 billion for lending purposes, and mortgage lender Amlak has had to be merged owing to fears of bankruptcy,” said Sultan. He explained that Pakistanis had booked properties in Dubai and Ajman to make a profit, but eventually discovered that they had incurred a loss after being swindled by several middlemen. “There were no builders, and of course, a structure cannot stand on its own without one.”He revealed the UAE market had declined by 21 per cent. According to him, local investors who had invested in the Arab country were mostly those who had dipped one hand in shares of the local stock exchange, and the other in UAE real estate. “Since both have been hit hard at the same time, these investors are feeling the pain. It’s disastrous for Pakistani investors.”

Sultan further said the reason for the downtrend is an imbalance between the demand and supply in the UAE real estate market. He expatiated the rapid pace of construction in Dubai had led to saturation in the market.

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