(DUBAI) A dearth of Dubai home sales and foreclosure auctions is stalling a recovery because buyers aren’t able to gauge how far prices have fallen during the market’s two-year slump.

‘There are very few transactions at the moment,’ said Craig Plumb, head of Middle East research at broker Jones Lang LaSalle Inc. ‘We are not going to see the bottom of the market until we see transactions through the foreclosure process.’

Home prices in the sheikhdom have dropped about 50 per cent from their peak two years ago and Credit Suisse estimates a further decline of as much as 20 per cent. Though at least 70 foreclosure cases have been filed under Dubai’s 2008 mortgage law, none has resulted in the sheikhdom’s first auction, said Jody Waugh, a partner at law firm Al Tamimi & Co.

‘People are only going to buy if they believe the price is realistic,’ Mr Plumb said.

Data provided by the Dubai Land Department is too incomplete to provide a valuable guide to selling prices, he said. The credit crunch prompted some Dubai property buyers to abandon investments and leave the country while others tried to renegotiate contracts after finding that they owed more than their property was worth.

Purchases fell about 80 per cent last year from the previous year, said Jesse Downs, director of research at Dubai-based Landmark Advisory. They increased 24 per cent in the first half of this year from a year earlier.

A dozen banks have filed foreclosures, mostly involving residential properties, since London-based Barclays plc won the first judgment at the end of last year, Ms Waugh said. His firm has secured about 12 rulings under the emirate’s 2008 mortgage law and the same number involving Islamic mortgages.

The first auction is unlikely to take place before the end of the year, following a ‘quiet’ summer and the holy month of Ramadan set to start in mid-August, according to Deepak Tolani, an analyst at Al Mal Capital.

Auctions ‘might help us get to the bottom faster since prices are likely to be considerably less than asking prices in the market now’, said JP Grobbelaar, director of research and advisory at property consultant Colliers International. ‘But I don’t believe prices won’t drop below what is achieved at auctions.’

Credit Suisse’s estimate of a 20 per cent decline would take average prices to about 837 dirhams (S$313) a square foot, based on its June estimate of 1,046 dirhams. Deutsche Bank AG analyst Nabil Ahmed predicted a price of 850 dirhams by the end of this year. UBS AG analyst Saud Masud sees a drop to about 600 dirhams.

Colliers estimated in a May 9 report that 41,000 new homes would be put on the market by the end of this year. That will lead to ’significant oversupply’ and downward pressure on prices, regional director Ian Albert said in the report.

Banks that have seized real estate outside of the foreclosure process have been reluctant to put properties up for auction, said Mohammed Sultan Thani, assistant director-general at the Land Department. Developers have preferred renegotiating repayment terms with customers to foreclosures.

‘The majority of banks are not eager to sell properties through auctions because the prices fetched may drag the market down,’ Mr Thani said. ‘Many prefer to reach deals allowing them to rent the properties for a few years.’

Barclays’s foreclosure case hasn’t been implemented, Dubai- based Faisal Iqbal, head of secured lending for the bank in the United Arab Emirates, said by e-mail. The Land Department ‘is in control of the sales process on the instructions of the Dubai courts’, he said.

Foreclosure sales will only provide a reliable guide if prices are set at a realistic level, said Mr Tolani. In Dubai’s last auction, which didn’t involve foreclosures, only one of four properties listed was sold, according to Mr Thani. Minimum prices at auctions are usually set by the courts in consultation with the land department, which conducts the sales.

If a property doesn’t sell, the court can reduce the minimum price over subsequent auctions, said Ms Waugh. However, by the time a new auction is scheduled, the market may have slipped further and the decreased price may still be too high to attract a buyer.

‘You’re constantly trailing a market that is declining and that most likely won’t result in transactions for a while,’ Ms Downs said. Dubai developers have renegotiated thousands of mortgages and extended payment schedules rather than face defaults that would cut off their cash flow. Though that slowed the decline in prices by limiting distress sales, it has prevented the market from reaching its natural bottom.

‘People are holding on as much as they can, refusing to adjust to market realities,’ Ms Downs said. ‘It’s delaying the inevitable. If people accept the reality faster, prices will come down faster and in a way recover faster as well.’ – Bloomberg

Source: Business Times, 22 Jul 2010

(DUBAI) Dubai house prices are not seen recovering before 2011 at the earliest while oversupply in commercial property will boost vacancy rates to more than 50 per cent next year Jones Lang LaSalle said on Sunday. A total of 26,000 homes are expected to be completed in 2010 and 25,000 in 2011, bringing total residential stock to 320,000 homes by the end of 2011, up from 287,000 at the end of the second quarter, the property consultancy said in a report.

‘Despite the recent stabilisation in pricing levels, Dubai’s residential market will experience a situation of oversupply and prices are not expected to recover before 2011 at the earliest,’ the report said.

‘Finance is a key factor in market recovery. The residential market has shown signs of improved lending in 2010 as more banks are injecting liquidity into the mortgage market.’ Dubai’s once booming property sector collapsed in the wake of the global financial crisis, leaving developers and customers with huge debts and several major projects unfinished.

Average apartment rents fell 10 per cent in the second quarter from the same period a year ago, and were down 4 per cent from the first quarter this year. Average villa rents fell 23 per cent in the second quarter from the second quarter of 2009 and were down 11 per cent from the first quarter this year. Greatest declines were in the luxury and high-end for both categories, the report said.

Apartment prices remained stable while villa prices rose marginally over the quarter.

While Dubai’s office market is expected to experience a supply overhang, there is still a shortage of good quality supply, the report said.

2010 represents the peak in new supply with 20 million square feet of supply expected, but only 25 per cent of that is currently complete and further delays are expected. — Reuters

Source: Business Times, 29 Jun 2010

The funds ‘are likely to be emerging as the new powerhouse in terms of global real estate capital flows in 2010′, Fadi Moussalli, regional director at Jones Lang LaSalle MENA, said in the report.

‘Cash-rich and with a strong appetite for splashy overseas assets, Qatari vehicles have lately outshined their counterparts from the region and are projected to carry on with their rapid expansion across the real estate world,’ Mr Moussalli said.

The International Monetary Fund expects the Qatari economy to grow 18.5 per cent this year, far above estimates for the rest of the Gulf Arab region. Harrods Ltd, owner of the London luxury department store, was sold to Qatar Holding by Mohamed Al-Fayed last month. The price was £1.5 billion (S$3 billion), said two people familiar with the transaction.

Qatar is the largest shareholder in Songbird Estates plc, which controls more than half the buildings in the Canary Wharf estate in London, J Sainsbury plc, the UK’s third-biggest supermarket owner, and Barclays plc, the UK’s third-largest bank by assets. It’s also the second- largest shareholder in London Stock Exchange Group plc and has a stake in Volkswagen AG, the German carmaker.

‘Their ability to compete in this market will be increased by the decline in investment from German open-ended funds, which were among the major global investors in 2009,’ Mr Moussalli said.

The German funds are likely to make fewer acquisitions government relations tighter, he added. — Bloomberg

Source: Business Times, 15 Jun 2010

Colliers, a global real-estate-services firm, estimates that 41,000 residential units will enter the market by the end of 2010, mostly in the low- to mid-income segments. House prices in the first quarter were on par with 2007 levels, rising on average to 1,061 dirhams (S$398.8) a square foot from 1,037 dirhams a year earlier, Colliers said in an e-mailed report on Sunday.

‘There will be significant oversupply in the market by the end of the year, so it is anticipated the index will experience fluctuations in value going forward,’ Colliers’ regional director Ian Albert said in the report. ‘Demand is not expected to match the growth in supply, creating downward pressure on property prices,’ according to the document.

Dubai’s property prices have slumped more than 50 per cent since their peak in mid-2008 as the financial crisis forced companies to dismiss workers. The market’s collapse followed a construction boom that created thousands of homes just as demand began to evaporate.

Apartment prices in the emirate gained 6 per cent in the first quarter compared with the previous three months and villa prices rose 2 per cent while the cost of townhouses was down 4 per cent, Colliers’ house-price index showed.

‘Numerous’ banks and mortgage providers increased the loan-to-value ratio to between 75 per cent and 90 per cent in the first quarter, according to Colliers. Some also lowered interest rates on mortgages to between 6.5 per cent and 8.5 per cent. — Bloomberg

Source: Business Times, 11 May 2010

Arabtec and Aabar Investments each announced they were scrapping the proposed US$1.74 billion deal in brief statements yesterday on local stock exchanges. No reason was given for calling off the tie-up, which would have given Aabar a 70 per cent stake in the builder. They left the door open to partnering in the future.

‘The parties have agreed they will work together in good faith toward further cooperation and forming a strategic partnership in Abu Dhabi in the future,’ the companies said.

Representatives for the two companies could not be reached for comment.

Arabtec’s balance sheet has been weakened by the global financial crisis and a severe property slump in its home market Dubai, where property values have plunged by half from their peak in 2008.

Plans for the deal with Aabar were floated in January amid a push for closer economic integration between struggling Dubai and the oil-rich federal capital Abu Dhabi.

Several Dubai state-linked companies that are laden with billions of dollars of debt and have scrambled to pay their bills are among Arabtec’s customers.

Although Arabtec is not owned by Dubai’s government, analysts say the indebted sheikdom is the company’s largest debtor. Some saw the deal with Aabar as a backdoor way for Abu Dhabi to aid Dubai by shoring up one of its biggest contractors.

Dubai’s government last month outlined details of a long-awaited restructuring plan for its struggling conglomerate Dubai World. That plan calls for a cash injection of up to US$9.5 billion and provisions for further payments to contractors such as Arabtec.

Roy Cherry, an analyst at Shuaa Capital in Dubai, said that gave Arabtec more options because it provided a framework for the company to be repaid.

‘The visibility of future cash flows increased and uncertainty has declined substantially,’ he said. ‘Dubai’s move raised Arabtec’s bargaining power, (and) the management realised this was no longer a good offer.’

Aabar is majority owned by the government of Abu Dhabi. It has become one of the sheikdom’s most active investment funds over the past year, making big investments in Mercedes-Benz maker Daimler, Richard Branson’s commercial space travel startup Virgin Galactic and Formula One champion team Brawn GP.

Arabtec is among Dubai’s best-known construction companies. It was one of the main contractors on the record-breaking Burj Khalifa, the world’s tallest skyscraper. It employs 52,000 workers, according to its website.

Source: Business Times, 15 Apr 2010

The conglomerate, which has been locked in talks with its creditors, will discuss how it plans to repay its commitments with an informal bank panel, which represents 97 creditors to the state-owned conglomerate, in Dubai.

‘People will be looking for anything not already priced in (the market) such as a government guarantee,’ said Robert McKinnon, ASAS Capital’s chief investment officer.

The debt is linked mainly to Dubai World’s property units, Nakheel and Limitless World. The company ringfenced other key assets, such as ports operator DP World, from the restructuring.

Talks have tested the tolerance and positions of both sides with early reports floated about a ‘haircut’, or loss, as large as 40 per cent, while bankers have countered with demands for nothing less than full repayment.

A final proposal on the debt could involve tranches with different repayment profiles, one with a repayment over three to five years, with the principal discounted, and another with repayment over seven to nine years with no discount.

The eventual proposal will centre on the extension of maturities with low or zero interest, and the option of an early exit at a discount or eventual repayment over a longer period of time.

‘We now expect much better scenarios, an extension of the maturity date giving domestic banks some breath,’ said Rami Sidani, head of Mena at Schroders Investments.

He said that a ‘haircut’ would have had a ’severe impact’ on domestic banks and leave them in need of a capital injection from the UAE central bank. Moody’s estimated local banks have US$15 billion in exposure to Dubai World.

The quality of the offer rests with Abu Dhabi, Dubai’s wealthier and larger neighbour, which bailed the emirate out late last year.

‘It looks very much like the main scenario of Abu Dhabi bailout is taking shape,’ said David Butter, director for Middle East and North Africa, Economist Intelligence Unit.

‘I doubt that we will ever be able to get an authoritative figure on it, but the bottom line is that Abu Dhabi seems to have decided that it has to pay whatever is necessary to avoid serious reputational damage for the UAE as a whole.’

A Dubai government spokeswoman said on Tuesday that meetings with the core creditor committee, known as CoCom, were part of ‘an ongoing dialogue related to the restructuring process’.

The spokeswoman said that Dubai remains on track to present a formal proposal to creditors this month.

The panel includes Standard Chartered, HSBC, Lloyds, Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank, which, combined, are believed to have two-thirds of the total exposure.

Dubai said in November that it would ask creditors to delay repayment on US$26 billion in debt linked to its flagship conglomerate Dubai World, sending shockwaves through markets.

The last-minute lifeline from Abu Dhabi helped the glitzy Gulf Arab emirate, known for its tax free earnings and easygoing lifestyle, avert default on a US$4.1 billion Islamic bond linked to Nakheel.

‘For creditors, it would be music to their ears to know that Abu Dhabi is involved in any restructuring plan,’ said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.

Source: Business Times, 25 Mar 2010

The third-largest developer in the Gulf Arab emirate has been hit by the global downturn, which has sent prices in Dubai’s once-booming property sector tumbling some 50 per cent from their peaks in 2008.

The developer has received offers for its Ritz Carlton hotel in Dubai which the debt-laden firm is hoping to sell for about 1.5 billion dirhams (S$570.8 million).

‘The company’s complete projects have achieved their investment targets, and it’s not strange that we offer them to investors for sale, particularly as we have giant projects under way,’ Khalid bin Kalban told the Arabic daily al-Bayan.

‘Buyers are mainly investment companies and individuals who are looking to buy complete and rented properties with an income of 7-8 per cent,’ he added.

In a separate interview with the UAE Arabic daily al-Ittihad, Mr Kalban said the funds raised from asset sales will be used to repay financial commitments and finance ongoing property projects.

The firm posted a third consecutive quarterly loss on provisions for contracting and property revaluation.

It has 6.5 billion dirhams of outstanding debt, of which 2.8 billion had been rescheduled for payment to 2011 from 2009, with the remainder maturing in the long term.

Source: Business Times, 20 Mar 2010

Dubai’s property market will recover by the end of 2011 as mortgages become easier to obtain and more people move to the city, according to the developer of a US$4 billion hotel and residential project.

‘Banks can’t stay away for long,’ Santhosh Joseph, 45, chief executive officer of Dubai Pearl, said in an interview. ‘They have to lend and, historically, most of this region’s lending goes into property.’

Dubai, the second-biggest sheikhdom in the United Arab Emirates, experienced the world’s worst property slump during the global recession, with selling prices falling by more than 50 per cent and project cancellations exceeding US$300 billion. To sustain itself, Dubai Pearl is relying on US$1.5 billion paid for apartments in advance and another US$500 million that has been committed by Al Fahim Group, Mr Joseph said.

‘We’re not expecting to sell substantially in 2010 and 2011. We are a zero-debt company but we may look into leveraging at a later date.’

Mr Joseph has a 20 per cent stake in Dubai Pearl while the rest is owned by a group of investors led by Al Fahim Group, one of Abu Dhabi’s wealthiest families.

Dubai Pearl is building four 73-storey towers connected by a single roof less than a mile from the emirate’s palm-tree shaped man-made islands. The project, which has the same name as the company, will have 20 million square foot of hotel and residential space.

MGM Grand, SkyLofts, Bellagio, and Baccarat are among the six hotels that will have 1,400 rooms. The main structure will be surrounded by an artificial beach and low-rise buildings containing malls and theatres. The project is scheduled for completion in 2013.

The property crisis prompted Dubai Pearl to review the project and add entertainment and health components to the design, Mr Joseph said. The company also renegotiated terms with buyers, such as longer payment schedules, to reduce the chance of defaults.

‘In 2010 and until the second half of 2011, I’m not expecting the international markets to be liquid or mortgages to be widely available,’ he said. ‘Real-estate cycles are usually three years peak-to-peak and the best locations tend to bounce quickly.’

Dubai Pearl is at the centre of a newly developed part of the city, surrounded by populated areas such as Palm Jumeirah, Dubai Media City and Dubai Internet City where international media and technology companies are based. The densely populated Dubai Marina is also nearby.

The project has the ‘best location with a captive clientele in a six-mile radius,’ Mr Joseph said. ‘Our area lacks communities where residents can walk from end to end.’

The company is selling residential space at 2,250 dirhams (S$854) a square foot, while furnished and serviced Baccarat-branded apartments are selling starting at US$1,000 a square foot. The prices have been slashed by about 30 per cent, he said.

Source: Business Times, 18 Mar 2010

The two companies will seed a joint investment of US$50 million for the fund, which will focus on logistics warehouses, healthcare and education-related assets in Saudi Arabia and the Gulf Arab region, they said in a statement. Saudi Arabia has earmarked around US$400 billion to boost infrastructure over the next five years and is looking to cater for growing demand for new housing from the young population in the world’s largest oil exporter. al Rajhi and Arcapita have completed the first acquisition for the fund and bought a logistics and distribution centre in the kingdom’s capital, Riyadh, for US$79.7 million.

‘We believe that this fund is launching at a time that will allow us to deploy our financial resources to gather a portfolio of prime real estate assets at attractive valuations,’ Jorge Cantonnet, managing director and head of private equity at Al Rajhi Capital said.

The logistics facility is the main distribution hub for Azizia Panda United Company, a leading supermarket firm in the kingdom, and will be leased back to Azizia over 18 years, the statement said.

Dubai-based investment bank Rasmala Investments said in October it was setting up a 500 million riyal (S$187.88 million) Islamic property fund to pursue opportunities in mid-income housing in Saudi Arabia. But in Dubai, which has been worst affected in the region by the economic downturn, the emirate’s second-largest developer, Deyaar, postponed earlier in February a 500 million-dirham (S$191.8 million) distressed property fund after international investors withdrew previously committed funds.

Property prices in Dubai have plunged some 60 per cent since their peaks in 2008 and billions of dollars worth of projects have been put on hold or cancelled.

Source: Business Times, 23 Feb 2010

Until now.

Barclays plc has won the sheikdom’s first foreclosure cases in court, clearing the way for lenders holding about US$16 billion of Dubai home loans to take action when borrowers don’t pay.

Islamic lender Tamweel PJSC, the emirate’s biggest mortgage bank, has several of its own foreclosure claims pending and estimates about 3 per cent of its mortgages are in default.

‘Banks will be more aggressive in pursuing legal action if they see the process is efficient,’ said Antoine Yacoub, a banking analyst at Moody’s Investors Service Inc. ‘They were trying to avoid the courts and restructure most of their loans, but once they see a precedent has been set, they will be encouraged to push more cases through.’

The successful foreclosures by Barclays may open the floodgates in Dubai’s property market, which went from the world’s best in 2008 to the worst after credit dried up and speculators who had fuelled price increases left the market, according to Deutsche Bank AG. Moody’s estimated in September that 12 per cent of the 27,000 residential mortgages in the sheikdom would default within 12 to 18 months.

Banks and developers until now have avoided the process of reclaiming homes through the courts, barred by tradition and an arcane legal process that few understood. The Barclays and Tamweel cases may change that because they show that a 2008 mortgage law – setting out rules for default, foreclosure and repossession – is working.

The law requires lenders to give homeowners 30-day notice of their intent to pursue a foreclosure, said Jody Waugh, a partner at law firm Al Tamimi & Co in Dubai. Courts then review the case and can issue a debt judgment that turns the property over to Dubai’s Land Department for auction.

Mr Waugh estimates that the process may take two to four months.

Barclays, Britain’s second-largest bank, said in an e- mailed reply to questions that it won the foreclosure orders, without providing details of the cases. The ruling shows that Dubai’s market is ‘evolving and is poised to come at par with other mature markets of the world’, the bank said.

Both lenders and developers in the United Arab Emirates have tried to stem rising defaults through out-of-court settlements with distressed customers after falling prices left buyers with mortgages worth more than their properties. That has helped minimise the amount of bad debt on their balance sheets and kept repossessed houses off a market that’s already suffering from too much supply.

Provisions for bad loans in the UAE surged 68 per cent to 32 billion dirhams (S$12.1 billion) as of November, compared with a year earlier.

Before the mortgage law was passed, lenders and builders could resort to the courts to enforce contracts, though they didn’t have the right to foreclose.

Tamweel’s pending cases, filed almost two months ago, involve homes abandoned by owners who left Dubai at the onset of the global financial crisis, chief executive officer Wasim Saifi said.

Tamweel’s default rate has been ‘hovering between 2.5 per cent and 4 per cent for the past six months,’ he said.

As alternatives to foreclosures, lenders in Dubai have extended payment periods and developers allowed customers with several properties to return some of them.

The absence of mortgage securitisation here makes it easier for UAE lenders to restructure loans than their counterparts in the US, where mortgage debt was often sold on to investors.

UK-based Standard Chartered plc and HSBC Holdings plc top the list of foreign banks providing mortgages in the UAE, according to Deepak Tolani, senior research associate at Al Mal Capital PSC.

‘While it is not Standard Chartered’s preferred approach, foreclosure is a legitimate course of action should a borrower not meet their obligations,’ the bank said in a statement.

HSBC declined to comment on the issue when contacted by Bloomberg, while Islamic mortgage lender Amlak Finance PJSC didn’t respond to e-mailed questions.

Banks are unlikely to head to the courts to foreclose on properties en masse because of concerns that large numbers of repossessed properties on the market will drive prices lower, said Saud Masud, a Dubai-based real estate analyst at UBS.

While auctioning a few properties ‘will be easy’, hundreds or even thousands of foreclosure sales may draw buyers away from new and secondhand properties, Mr Masud said.

‘It’s a slippery slope,’ he said. ‘Mass auctions may re-price the property market in a meaningful way as investors prefer to pick real bargains in auctions.’

A cultural stigma attached to forcing people out of their homes has also deterred foreclosures. However, that may not protect speculative investors who helped drive prices up by buying several properties with the aim of selling at a profit soon after.

‘The mortgage law has given clarity and certainty to the exact process that must be followed by anyone wishing to enforce a mortgage,’ said Mr Waugh, whose firm is currently handling fewer than 10 repossession cases.

Dubai’s population, which is about 90 per cent expatriate, may drop by 8 per cent in 2009 and another 2 per cent in 2010, UBS AG estimated in March last year. Dubai’s immigration department doesn’t provide regular statistics on visas.

Citizens make up only about 20 per cent of the overall UAE population, which largely consists of workers from countries including Pakistan, the UK and Lebanon. Workers have one month to leave the country after their work visas are cancelled.

Dubai first allowed foreigners to own property in 2002. That led real estate prices to quadruple in the following six years, helped by a growing expatriate workforce and speculation fuelled by borrowing.

The UAE last year scrapped a rule that automatically qualified homeowners in Dubai for a permanent residency visa. Owners of properties valued at one million dirhams or more are now required to renew residency visas every six months.

About 65,000 residential units will be completed in Dubai by 2011 and the emirate needs to create a minimum of 100,000 white-collar jobs to satisfy oncoming supply, Nomura said on Oct 15.

Deutshe Bank estimates that 30,000 units may be delivered by the end of this year.

‘When people talk about litigation in the Middle East, they’re concerned over the possible time it would take to obtain a judgment,’ Mr Waugh said. ‘The speed at which it appears judgments may be obtained under the mortgage law is a real, positive sign for banks.’ The Barclays cases were filed in November, he said.

The UAE’s central bank in October proposed reducing the time it takes for a loan to be classified as non-performing by half to 90 days. Banks ‘most probably’ will be asked to comply during the first quarter of this year, said Sofia El Boury, a banking analyst at Shuaa Capital PSC.

So far, no properties have been auctioned, according to Mohammed Sultan Thani, assistant director general at the Dubai Land Department. Requests may start pouring in this year as banks give up on other alternatives, he said.

‘Amicable solutions are hard to reach when a buyer has lost his job’ or when a property is worth less than the amount owed on it, Mr Thani said.

Mortgage loans totalled 137.6 billion dirhams in July last year, central bank data shows. About 25,000 to 30,000 mortgages have been taken in the UAE with over 95 per cent of them in Dubai, analysts say.

The central bank estimates that real estate accounts for about 13 per cent of total loans in the UAE. Shuaa Capital’s Ms El Boury said the real figure is ‘much higher’ and official numbers aren’t realistic ‘given the financing contributions to real estate construction and development in the UAE.’

The new mortgage law applies to only some kinds of Islamic lending, Mr Waugh said.

Shuaa estimates about 25,000 mortgages were extended by Tamweel and its competitor Amlak alone. The two lenders, which control more than half of the UAE’s mortgage market, are set to merge this year. Shares of both companies have been suspended since November 2008.

The biggest risks to banks come from loans underwritten after 2007, which are ‘most probably in deep negative equity by now’, Moody’s Mr Yacoub said.

Also at risk are Islamic Istisna’ mortgages where a buyer doesn’t make any payments until the property is delivered, he said.

Barclays said the court’s decisions will renew lenders’ faith in Dubai’s legal system, ‘which could result in bigger lending mandates specifically for mortgage business’.

Judging by the first cases, the process seems to be working, Al Tamimi’s Mr Waugh said. ‘Like anything, there are a few teething problems that are being resolved, but the fact that we have obtained judgments so quickly is positive.’

Source: Business Times, 12 Jan 2010