“The UAE market is headed for broader stability. Over the next few months, there will be a correction in areas seen as overvalued while at the same time there will be pockets that will maintain their upwards climb,” said Haider Khan, CEO of UAE real estate portal Bayut.com.
Thanks to tighter regulations by the U.A.E. government and a more conservative business plan from property developers, the residential real estate market of Dubai in particular is becoming more stable. Although property prices skyrocketed 35% in 2013 and rang all sorts of alarm bells at the International Monetary Fund and World Bank, 2014 has seen Dubai real estate investors take their collective heads out of the clouds.
“Newly implemented regulations on loan concentration and real estate exposure for banks will help protect the soundness of the banking system, which has remained amply capitalized and liquid. The new loan concentration limits will help contain risks to banks’ balance sheets in the context of newly planned megaprojects,” said Harald Finger, IMF mission leader to the U.A.E.