S&P: S&P calls Dubai’s real estate recovery “fragile” and uneven

Dubai real estate S&P Global Ratings stated that prices have rebounded strongly from their historical lows at the end of 2020, but unbalanced demand and oversupply of residential properties will put pressure on prices for a long time and make the recovery fragile.

Real Estate Investment Company CB Richard Ellis Group It was stated last week that in the 12 months to August, the average residential property price in Dubai rose by 4.4%, the highest annual growth rate since February 2015, but the continued decline in apartment rents indicates that the long-troubled industry continues to weaken .

Standard & Poor’s said: “The rebound in residential real estate demand has largely benefited quality developers, and pre-sales and price improvements have surged.”

It said that market data showed that condominiums, which account for 85-90% of properties, saw prices rise by about 6% in the second quarter. Rents for villas are also accelerating, while rents for apartments are still lagging behind.

Reuters It was reported in March that the luxury sector in the Dubai real estate market has been boosted since the sharp decline last year, but the overall recovery of real estate still has a long way to go.

Even in coronavirus Pandemic, long-term economic trend United Arab Emirates Since the oil price plummeted in 2014-15, it has been sluggish.

In this market, most of the population is foreigners, and many of them left the market during the pandemic. Over the years, the supply has exceeded the demand for new houses and apartments.

Standard & Poor’s stated that real estate prices are at a low point in the cycle and are expected to rebound from 2021-2022 due to improved consumer confidence, rising oil and gas prices, high vaccination rates in Dubai, and the city’s World ExpoDelayed by one year due to the epidemic.

“In the long run, we believe that the demand for residential properties will depend on the success of the government’s recent measures against population growth, such as new visas and freer social laws,” Standard & Poor’s said.