Housing loans rise to Dhs41.9bn during the first half of 2008

The property sector has seen heated disputes on how the housing sector, which is deeply rooted within the property sector, should be supported, as well as around what immediate action should be taken to overcome the global financial crisis that has inflicted an unprecedented recession due to psychological factors, which are influencing the investment process and leading to constricting capital movement in the market.

Dr. Abdul Rahman Al Tassan, Rakaa Properties' CEO, believes that confusion among investors has led them to be reluctant to engage in any type of investment. This has had a negative effect on money markets due to a lack of cash flow, which has led to the raising of loans and new restrictions, making real estate development rather complicated.

"Most agree that moving the property markets should be done with useful and available funding methods, and the need has now arisen for new financing methods that do not depend on broad financing, such as Rent-and-Own. The government's support of the investment process ensures a safe haven until the effects of the financial crisis wear off and growth again continues to make up for the damage inflicted,"

added Al Tasan, whose company is developing two residential towers, with a total value of Dhs1.5bn and using Smart Building technology, on Al Reem Island in Abu Dhabi.

Rent-and-Own states that rental installments are dealt with as purchase installments during an investor's utilization of a property. Once the installments are fully paid according to the agreed schedule, the investor becomes the owner of the property.

Emirati Government has pumped a liquidity of Dhs 70bn into the market in the form of long-term trusts to support the banking sector. Dhs 50bn was distributed, while the remaining Dhs 20bn is yet to be allocated to the appropriate sectors. This support process by the government has had a remarkable influence on the return of confidence in the investment process in general, and in the property market in particular.