No signs of improvement for UAE's realty sector: S&P

Published April 28th, 2016 - 09:00 GMT
Dubai's real estate developers are expected to continue seeing robust revenues despite the challenges.  (Realestatedubaiproperty.com)
Dubai's real estate developers are expected to continue seeing robust revenues despite the challenges. (Realestatedubaiproperty.com)

The UAE real estate sector will continue to face some headwinds this year, with property prices forecast to drop by 10 per cent, on average.

In its latest note released on Wednesday, Standard & Poor’s Ratings Services said the country’s property market is still reeling from the impact of low crude oil prices and is not showing any signs of improvement so far. The market is also feeling the pressures from a strong dollar and weaker tourist sentiment.

Property prices in the country posted a 10 per cent to 13 per cent decline in 2015. This year, house prices in Dubai are forecast to drop further by 10 per cent, while those in Abu Dhabi could register a “low-single-digit” decline due to weaker investor sentiment.

“For the coming year, we see no sign of market improvement for the UAE real estate sector, despite housing affordability improving from the current price environment,” S&P said in a statement sent to Gulf News.

Following the decline in oil prices, reports indicated that a number of businesses in the UAE have either tightened hiring plans or reduced their headcount. A strong dollar, to which the UAE dirham is pegged, also means that buying property in the country has become more expensive for some foreign investors.


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