Nearly four years after the UAE housing boom first began to deflate, banks still hold about a fifth of their total assets in the property market.
Total bank exposure to the property market stood at Dh232 billion (US$63.16bn), the Central Bank said in a report released yesterday.
The net amount represents 21.5 per cent of banks' deposit base and 21.3 per cent of their total net loans and advances.
The Central Bank examined the impact of the property boom and bust on the banking system in its Financial Stability report.
Like the US savings and loans crisis in the 1980s, the property crash in Japan and Sweden in the 1990s and the more recent western sub-prime crisis, the UAE's property downturn hurt banks' balance sheets. "As we have learnt from other countries' experiences, real estate booms and busts can have far-reaching consequences for a country's banking system, the Central Bank report said.
"The UAE real estate market witnessed a similar pattern, a boom during the years 2005 to 2007 followed by a bust in 2008."
But it said banks had been saved from further pain by the large concentration of development activity in the hands of government-related firms. The developers Nakheel, Limitless and Aldar are among those to receive Government support to help clear debts and start afresh.
"This has enabled the bust cycle to evolve in a controlled environment and limited the systemic spillover," the report said. Signs suggest the property market is starting to stabilise and pick up in some areas. Sales crept up in Dubai during the second quarter compared with the previous quarter, according to data from the property consultancy CBRE.
Banks, too, are reporting an increased appetite in lending to people buying houses and others investing in the property market.
"It's more of a case of steady as she goes now compared to 2007 and 2008," said Craig Plumb, the head of research at Jones Lang LaSalle, a property consultancy, adding last year and this year "have been more stable with the market starting to improve selectively".
The Central Bank data offer a snapshot of the state of investment in the market.
A total of 45.1 per cent of banks' exposure in the property market relates to individuals, with more to UAE nationals than expatriates. Corporate investors, the next largest group, represent 30.8 per cent of lenders' funding.
Much of the investment relates to commercial and residential property companies, in addition to hotels, shopping malls and warehouses. A further 24.1 per cent of banks' exposure is with developers.
The data also examine property investments outside of the banking system. UAE nationals have a larger exposure to property than foreigners, show the data. Nationals have invested Dh37bn in the residential segment and a further Dh30bn in commercial projects. Foreigners have invested a similar amount in residential, Dh37.6bn, but less in commercial at only Dh4.4bn.
However, businesses have the largest exposure, the data show. Companies have Dh132bn of investments with more than half of the amount related to the purchase or construction of residential buildings.
The report said companies in the property industry had been working to boost their health.
Firms have cut their leverage ratio from 212 per cent in 2010 to 158 per cent last year, it said.
"Such deleveraging has come mainly in the form of write-downs of asset values which impacted the sector's profitability, resulting in yet another negative return on equity of minus 6 per cent in 2011," the report said.
"This, however, is a marked improvement from the large losses suffered in 2010."
How quickly developers and banks can return to profits is likely to help determine how fast the UAE can rebound.
tarnold@thenational.ae
COMPANY%20PROFILE
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
'The Sky is Everywhere'
Director:Josephine Decker
Stars:Grace Kaufman, Pico Alexander, Jacques Colimon
Rating:2/5
CONCRETE COWBOY
Directed by: Ricky Staub
Starring: Idris Elba, Caleb McLaughlin, Jharrel Jerome
3.5/5 stars
In Praise of Zayed
A thousand grains of Sand whirl in the sky
To mark the journey of one passer-by
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Shall such grains sing before they start to fly?
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Stands always One, defiant and alone
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Then comes the Test; and only then the time
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History will not forget: that one small Seed
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More than a debt, the Emirates owe to Zayed
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No praise from Roderic can increase his Fame.
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The changing years grow Gardens in the Sand
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But Hearts are not rebuilt, nor Seed resown.
What was, remains, essentially Alone.
Until the Golden Messenger, all-wise,
Calls out: "Come now, my Friend!" - and All is known
- Roderic Fenwick Owen
Company%20profile
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TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%3A%3C%2Fstrong%3E%20Eco%20Way%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20December%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Ivan%20Kroshnyi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Electric%20vehicles%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Bootstrapped%20with%20undisclosed%20funding.%20Looking%20to%20raise%20funds%20from%20outside%3Cbr%3E%3C%2Fp%3E%0A
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
In-demand jobs and monthly salaries
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- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The stats: 2017 Jaguar XJ
Price, base / as tested Dh326,700 / Dh342,700
Engine 3.0L V6
Transmission Eight-speed automatic
Power 340hp @ 6,000pm
Torque 450Nm @ 3,500rpm
Fuel economy, combined 9.1L / 100km
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
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Arabian Gulf League fixtures:
Friday:
- Emirates v Hatta, 5.15pm
- Al Wahda v Al Dhafra, 5.25pm
- Al Ain v Shabab Al Ahli Dubai, 8.15pm
Saturday:
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- Sharjah v Al Wasl, 5.20pm
- Al Jazira v Al Nasr, 8.15pm
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
Brief scores:
Pakistan (1st innings) 181: Babar 71; Olivier 6-37
South Africa (1st innings) 223: Bavuma 53; Amir 4-62
Pakistan (2nd innings) 190: Masood 65, Imam 57; Olivier 5-59
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Hoopla%3Cbr%3E%3Cstrong%3EDate%20started%3A%20%3C%2Fstrong%3EMarch%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Jacqueline%20Perrottet%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2010%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3EPre-seed%3Cbr%3E%3Cstrong%3EInvestment%20required%3A%3C%2Fstrong%3E%20%24500%2C000%3C%2Fp%3E%0A
Company%20profile
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Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ENamara%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJune%202022%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3EMohammed%20Alnamara%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%20%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EMicrofinance%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%20%3C%2Fstrong%3E16%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFamily%20offices%0D%3Cbr%3E%3C%2Fp%3E%0A
Structural%20weaknesses%20facing%20Israel%20economy
%3Cp%3E1.%20Labour%20productivity%20is%20lower%20than%20the%20average%20of%20the%20developed%20economies%2C%20particularly%20in%20the%20non-tradable%20industries.%3Cbr%3E2.%20The%20low%20level%20of%20basic%20skills%20among%20workers%20and%20the%20high%20level%20of%20inequality%20between%20those%20with%20various%20skills.%3Cbr%3E3.%20Low%20employment%20rates%2C%20particularly%20among%20Arab%20women%20and%20Ultra-Othodox%20Jewish%20men.%3Cbr%3E4.%20A%20lack%20of%20basic%20knowledge%20required%20for%20integration%20into%20the%20labour%20force%2C%20due%20to%20the%20lack%20of%20core%20curriculum%20studies%20in%20schools%20for%20Ultra-Othodox%20Jews.%3Cbr%3E5.%20A%20need%20to%20upgrade%20and%20expand%20physical%20infrastructure%2C%20particularly%20mass%20transit%20infrastructure.%3Cbr%3E6.%20The%20poverty%20rate%20at%20more%20than%20double%20the%20OECD%20average.%3Cbr%3E7.%20Population%20growth%20of%20about%202%20per%20cent%20per%20year%2C%20compared%20to%200.6%20per%20cent%20OECD%20average%20posing%20challenge%20for%20fiscal%20policy%20and%20underpinning%20pressure%20on%20education%2C%20health%20care%2C%20welfare%20housing%20and%20physical%20infrastructure%2C%20which%20will%20increase%20in%20the%20coming%20years.%3C%2Fp%3E%0A
The specs: McLaren 600LT
Price, base: Dh914,000
Engine: 3.8-litre twin-turbo V8
Transmission: Seven-speed automatic
Power: 600hp @ 7,500rpm
Torque: 620Nm @ 5,500rpm
Fuel economy 12.2.L / 100km
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
