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HSBC Says Fears of a Property Crisis in U.A.E. Are 'Overblown'

  • Sales prices have fallen 9 percent in Dubai this year
  • Removal of Iran sanctions may lift demand for Dubai property
Commercial and residential skyscrapers line Sheikh Zayed Road, also known as the E11 highway, which links UAE's two biggest cities, Abu Dhabi and Dubai.
Photographer: Chris Ratcliffe/Bloomberg

Fears of a crisis in the United Arab Emirates real estate market are “overblown” because the impact of weaker currencies and slowdown in transaction numbers is lower than some reports suggest, HSBC Holdings Plc. said.

Transactions fell by 15 percent in the year through August for the U.A.E. and sales prices are down 9 percent in Dubai, HSBC said in a research note published today. The main foreign buyers of Dubai property are Indians, Britons, Pakistanis and Saudis, who have not been impacted by weakening currencies, HSBC said. The possible removal of sanctions on Iranian buyers could also lift demand for Dubai real estate, the bank said.