Cluttons, the real estate specialist that has enjoyed a dedicated presence in the Middle East since 1976 today issues its market report for Dubai's residential sector in Q1 2011.
According to the report, residential sale transactions in Dubai saw a natural increase in January and February. This was aided by the fact that Dubai is witnessing some positive activities; resurgence of available finance for property investments, as mortgage lenders such as Barclays, Standard Chartered and Gulf Finance continue to fight for market share offering competitive terms to a wider range of credit worthy clients. As well as offering mortgage rates for as low as 4.99%, banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available.
Other positive activity concerns those projects which were once on hold and now have resumed construction, as cheaper build costs allow developers to finish construction, a more favourable alternative than the costly return of investors' capital. Although project completion includes the possibility of increasing mortgage defaults down the line for investors whose payments are tied to construction milestones, Gulf Finance has stated that clients facing financial hardship will be afforded the opportunity to rework their payment schemes without facing criminal prosecution under Dubai's strict debt laws, which have in the past encouraged defaulters to flee the Emirate. Although these are reasons for caution, it appears that the market is learning from past mistakes.
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