The United Arab Emirates may be preparing a bailout plan for the real estate industry, said EFG- Hermes, according Bloomberg.
After the Government of Abu Dhabi implemented an action plan under which it will inject additional capital into the five largest Abu Dhabi banks, the Federal Government has yet to announce any bailout plans for the real estate sector.
Property prices in the U.A.E. “fell off a cliff†after banks reduced lending and speculators withdrew from the market because of the global economic crisis, Morgan Stanley said in a note to investors dated Jan. 30. In Dubai, prices have slumped 25 percent from the market’s peak in September, while Abu Dhabi prices have declined 20 percent.
HH Sheikh Mohammed Bin Zayed Al Nahyan, said in a report published on Sunday that Abu Dhabi should lead federal efforts to ease the slowdown across the seven-state federation, not just in the capital, according The Financial Times. The UAE’s capital financial stability and economic growth is underpinned by its oil revenue and sovereign wealth fund, but other states in the federation are feeling the pinch of the credit crunch – particularly Dubai.
Real estate and construction executives from across the Gulf called for intervention by Arab Governments and the sovereign wealth funds (SWF) they control to revive regional property sectors hit by the credit crisis.
