Fitch: Real estate declines for Russia, Ukraine, Gulf

In a preview of a forthcoming outlook update, Fitch Ratings said it said that while property markets in the Gulf Cooperation Council, Russia and Ukraine continue to decline further, the credit outlook for Gulf Cooperation Council property and construction issuers remains broadly stable due to varying degrees of state ownership, whereas it remains negative for Russian and Ukrainian companies in 2009.

In the Gulf, demand for construction and property is falling across the region, Fitch said, and access to finance remains difficult. The negative impact could be most severe in Dubai, as the residential and commercial property market is subject to increasing customer delinquencies and an ongoing shortage of liquidity, the agency said. But in Saudi Arabia, the downturn is likely to be less severe, as demand still currently outstrips supply, Fitch said.

Russia's property market downturn, which started in late 2008, is expected to continue through 2009, driven by Russian GDP declines, rationed financing for property buyers, stagnant investor activity and negative sentiment, the agency said.

For the Ukrainian real estate market, Fitch said it expects trading to remain very difficult during 2009 and into 2010, given the problematic macroeconomic conditions facing that country.

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