Tuesday 28 April 2009

In Dubai, Defaults Hit Developers

Developers here are scrambling to prevent a wave of investor defaults as they struggle to survive this city-state's real-estate bust.

During a frenzied property boom, many investors bought property on speculation, expecting to be able to quickly flip homes -- sometimes entire floors in buildings -- before construction was finished. But in recent months, prices have cratered, some falling by more than 50%.

Buyers of unfinished homes have all but disappeared. That has left many investors either unable or unwilling to make final payments, which often are due upon completion and amount to as much as 50% of the total price of the home.

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