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Bank financing for UAE property increases 6.2% in H1 2017

Bank financing for UAE property increases 6.2% in H1 2017

DUBAI: Bank financing provided to the property and construction sector in the UAE increased by $4.4bn (AED16.5bn) during H1 2017, about 6.2% from the end of 2016. The total bank credit channelled to the sector by the end of June reached $77bn (AED281.2bn), with funding provided to the property and construction sector comprising 19.3% of the total credit transferred to all business platforms in the country, according to UAE Central Bank statistics.

Investment returns in the real estate market are currently between 9% to 12%, with hotel developments coming in on top in terms of returns for investors, followed by retail projects, residential units, offices, and high-end, luxury homes. Credit flows to the realty and construction market significantly grew in the period from January through June, amounting to $626m (AED2.3bn) during Q1, and surging to $3.8bn (AED14.2bn) in Q2, the data revealed. The value of property developments announced since the beginning of the year crossed the $8.1bn (AED30bn) mark, including service, developmental, and community projects across the UAE.