The National newspaper reports that “Speculators are driving up the price of housing so quickly that they risk causing a “sharp” fall in property values, a new report from the Department of Planning and Economy warns.
Buyers were overpaying for properties bought off-plan, creating “a risky business which may result in a sharp drop in the value of new units, thus undermining the future of the sector and other supporting sectors such as building in construction”, said the report released yesterday.
It predicted that the thousands of new homes due to come onto the market in the next few years would create a glut that could send the value of investments downward.
Calling for tighter regulations, the department blamed banks and financial institutions for making it too easy to borrow money in the short term for property speculation.
The warning was included in the department’s weekly report and came just one day after the end of the Cityscape exhibition in Abu Dhabi, at which one-bedroom apartments in areas such as Raha Beach and Reem Island commanded prices of at least Dh2 million (US$545,000), and often exceeded Dh3m.”
SOURCE : The National Newspaper – Ministry: property values could fall.
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