Tuesday, August 22, 2017

Bank financing to UAE realty sector tops $76bn in H1

Bank financing provided to the property and construction sector in the UAE reached Dh281.2 billion ($76.5 billion) during the first half (H1) of 2017, rising by Dh16.5 billion and reflecting a growth of 6.2 per cent from the end of 2016.

According to UAE Central Bank statistics, funding provided to the property and construction sector comprised 19.3 per cent of the total credit channelled to all business platforms in the country, which is valued at Dh1.45 trillion by the end of the first six months of the year, reported Wam, the Emirates official news agency.

Property loans interest rates currently range at 4 - 5 per cent, an acceptable level, given the recent recovery recorded at the sector, according to market analysts, who added that investment returns in the real estate market hover between 9 per cent to 12 per cent for investors, with hotel developments coming on top in terms of returns followed by retail projects then residential units, offices and finally luxury homes which address high-income segments of society.

Credit flows to the realty and construction market significantly grew in the period from January through June, amounting to Dh2.3 billion during Q1, surging to Dh14.2 in Q2, according to Central bank statistics.

In the meantime, the value of property developments announced since the beginning of the year crossed the Dh30 billion mark, including service, developmental and community projects across the nation.

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