IMF Warns Dubai Of Property Bubble

By Editorial 15 November, 2013

The International Monetary Fund (IMF) has urged the government of Dubai to ensure that its property market is not driven by speculative buying, and to be ready to act as soon as it sees sharp increases in prices.

The warning was given by Masood Ahmed, the IMF's Middle East and North Africa director.

Speculation in the property market was partly to blame for Dubai's 2008-2010 financial crash in which prices fell by up to 60 percent. The IMF is concerned that another bubble is forming in the emirate's property market as house prices have soared over 20 percent in the past year.

In September of this year the government announced it would double the registration fee for real estate transactions to four percent in a bid to rein in speculation.

Ahmed noted that there are other measures which Dubai could pursue to limit speculation. As an example he cited Singapore's 15 percent one-time tax on sales of property which occur within six months of purchase.

The central bank of the United Arab Emirates last month imposed limits on mortgage loans and its governor said he does not believe a new house price bubble is forming.

Tags: United Arab Emirates | Investment | Real-estate Investment | Speculation | Real-estate | International Monetary Fund (IMF) | Singapore | Dubai | Expats | Middle East |


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