UAE real estate to face a difficult year ahead
The UAE real estate sector will face another difficult year after a correction in 2016, according to a report
The UAE real estate sector will face another difficult year after a correction in 2016, S&P Global Ratings said in a report on Thursday.
According to the ratings agency’s report, "Another Tough Year For UAE Real Estate Market Amid Currency Woes”, Dubai will continue to see residential prices and rents fall by another 5-10% in 2017.
“For 2017, we see no signs of market improvement for the UAE real estate sector, despite housing affordability improving from the current price environment,” said the report.
“With the fallout from low oil prices and continued currency woes, it is no surprise that 2016 was a tough year for the real estate market.
“Dubai's residential prices dropped by 8%-11% on average and rent fell by 6%, according to REDIN.com, with most areas of the city affected,” it added.
S&P expects to see no major negative movements in real estate ratings in the next 12-18 months however, as developers will be able to absorb the fall in house prices due to low debt burdens and strong balance sheets.
Last month, property developer Cavendish Maxwell said that rent prices in UAE cities will remain unchanged throughout 2017, reporting a 0.3% decline in apartment rents during Q4 2016.
Prices declined an average 3% over the last 12 months in Dubai last year as a result of residential demand being primarily driven by job growth for expats and redundancies in high income jobs, the property consultant reported.