Currency woes set to affect realty market

With currencies falling against the dirham, buyers from European countries are now spending less when it comes to real estate.

Buyers from European countries are now spending less because their currencies have declined against the dirham, Bloomberg reported.

Falling oil prices and a tax on foreign property held by Indians are also pushing down home values in the emirate. A year ago, Dubai regulators took steps to cool a market where home values had been climbing at the fastest pace in the world.

Investor sentiment “can change rapidly,” said Gregg Lemos-Stein, managing director of corporate ratings at Standard & Poor’s. “Buyers will hold off on any kind of activity and wait for prices to fall. That can exacerbate the decline.”

S&P predicts a price drop of 10% to 20% this year, according to Franck Delage, associate director of corporate ratings for Europe, the Middle East and Africa.

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