As credit crunch drives UAE mortgage provider to seek help from central bank
The asking prices for upmarket homes in Dubai fell by 19% during October, according to a new survey.
The news came as Tamweel, the UAE's second-largest mortgage provider, was forced to borrow funds from the central bank.
According to analysts at HSBC, the average asking price for an upmarket Dubai “villa” of the type favoured by rich expats in master developments fell by 19% month-on-month. The average across the board fell by 4% in Dubai, and by 5% in neighbouring Abu Dhabi.
Tamweel, a state-controlled mortgage provider to customers in the UAE, is now in talks with government agencies to repair its financial problems. The UAE central bank may now be forced to step in to shore up the property market.
The credit crunch has hit the UAE quickly and unexpectedly. This week, UK banks HSBC and Lloyds TSB announced they would streamline their mortgage lending criteria while developers such as Emaar Properties looked at relaxing restrictions on its property sales.
New developments are reportedly being put on hold in Dubai, but overall construction activity in the city has not yet been seriously affected.