Business | Property
Fears grow over realty jobs
Fears over widespread job losses are creating panic in Dubai's property market as developers and brokers are laying off hundreds of staff as part of cost-cutting measures due to the slowdown in sales.
- By Babu Das Augustine Banking Editor, Gaurav Ghose Financial Features Editor and Sunita menon Staff Reporter
- Published: 23:42 November 12, 2008
- Image Credit: Gulf News Archive
- A number of banks suspended lending to expatriate employees of leading real estate companies, fearing large-scale layoffs as personal loan applications multiply daily.
Dubai: Fears over widespread job losses are creating panic in Dubai's property market as developers and brokers are laying off hundreds of staff as part of cost-cutting measures due to the slowdown in sales.
On Wednesday, a number of banks suspended lending to expatriate employees of leading real estate companies, fearing large-scale layoffs as personal loan applications multiply daily.
According to information available to Gulf News, Emirates NBD, the region's largest lender has suspended retail credit facilities to expatriate employees working with a few real estate firms due to possible restructuring.
The bank has suspended banking services to employees of a dozen companies such as Tamweel PJSC, Amlak, Damac and its subsidiaries, Daman Investments PSC, Emaar, Nakheel, Sama Dubai, Dubai Properties, Union Properties and KM Properties.
While Lloyds TSB has stopped loans for purchase of apartments and dropped its loan to value ratio on villas in the UAE to 50 per cent, earlier this week HSBC doubled its minimum salary requirement for a personal loan from Dh10,000 to Dh20,000.
Adding to the gloom, UAE stocks fell sharply on Wednesday as the Dubai Financial Market General Index slumped 5.48 per cent and the Abu Dhabi Securities Exchange Index tumbled 5.66 per cent, shattering investor confidence further. UAE markets have lost more than Dh90 billion in capitalisation in the past four days.
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To allay the fears, the UAE Central Bank said on Wednesday it was looking at ways to support real estate lending as banks exercise greater caution during the credit crisis.
"The board discussed proposals to introduce fin-ancial vehicles for dealing with real estate loans, to ensure their continuity, in consultation with the Ministry of Finance," the bank said in a statement.
Banking industry sources said the package could comprise soft loans similar to the Dh120 billion the government offered to banks in September and October.
The Dubai Land Department on Wednesday said property buyers will lose 30 per cent of the sum paid for any property in case of cancellation, default in payment or breach of purchase contract, in what is seen by analysts as a desperate move to protect developers and punishing speculators.
Your comments
We should see different CEO's of bank coming on television shows to speak to the people and ease the fear, especially in the stock market. It should also interfere to regulate and control the jobs cut in the market.
Nasser Fakhouri
Dubai,UAE
Posted: November 13, 2008, 11:56
I believe the struggle to protect the developers alone is a wrong move. I think this approach will further hurt the GCC countries. Investors should also be protected.
Mohammad Asif Awan
Abu Dhabi,UAE
Posted: November 13, 2008, 10:42
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