The growth of real estate market is perhaps one of the strong indicators of financial stability of an economy. There is an interrelationship between the real estate prices and the bank lending; since loans are the main source of real estate finance. The impact varies in line with the dynamics of the real estate market. Due to the impact of the property prices on the profits of the banks, the growth in the real estate sector contributes to the stability of a country's financial system.
In the UAE too, the banking sector has been exposed with the booming real estate market and remained at higher levels. A leading global ratings agency recently predicted that this exposure in the UAE would increase in the coming years with the banking sector’s performance in their participation in the development of the real estate sector. The report comes after examining the potential growth witnessed during past two years in the real estate market, which now shows signs of stabilization.
In the UAE too, the banking sector has been exposed with the booming real estate market and remained at higher levels. A leading global ratings agency recently predicted that this exposure in the UAE would increase in the coming years with the banking sector’s performance in their participation in the development of the real estate sector. The report comes after examining the potential growth witnessed during past two years in the real estate market, which now shows signs of stabilization.
