Dubai, May 18 (UNI) Is a sub-prime crisis brewing in Abu Dhabi ? Is the property bubble about to burst in the West Asian country ? The Abu Dhabi government has warned people to exercise caution while dealing with the property market.
The government fears that speculators are keeping the property market over-heated. However, thousands of new housing units which are in the offing may drag down the prices of real estate.
Abu Dhabi's Department of Planning and Economy (DPE) warned that buyers who overpay for properties bought off-plan were creating ''a risky'' business which may result in a sharp drop in the value of new units, thus jeopardising the future of the sector and other allied fields such as building and construction.
The Department also called for legislation to rein in banks and financial institutions which make it too easy to borrow money, saying that their over dependence on the real estate sector needs to be corrected.
Developers dismissed the concerns, saying fast off-plan sales were ''common in a 'young market' in which primary and secondary markets emerged for investors and residents.'' The real estate market in the UAE led by Dubai is highly overheated with hundreds of new flats and plots snapped up by speculators at prices unheard of in the region. As the rents have exponentially grown, many expatriates have bought into the housing sector.
UNI XC PD HT1325