UAE property market set to decline, says S&P

AFP, DUBAI: The UAE property market is set for a soft correction after three years of sharp rises but a crisis is ruled out, Standard & Poor’s ratings agency said on Monday.
A report said additional supply and lesser demand on the United Arab Emirates property market his year is likely to result in a 10-20 per cent correction in Dubai residential real estate prices.
The S&P report stressed this would be much less than the 2009 bubble.
“The diversifying economy, positive demographics, and protective measures from local regulators should help prevent a crisis like that of 2009,” S&P said.
“Stronger capital structures and good revenue mixes should allow issuers to withstand headwinds over the next 12-24 months,” the report added.
The agency said that after reaching a peak last year, the UAE property market will soften in 2015 and early 2016.
“The market is facing a turnaround in operating conditions that is likely to dampen performance,” said S$P, adding that the sharp decline in oil prices will markedly impact UAE economic growth.
“We believe real estate companies in the UAE are better armed to deal with the current slowdown and should be able to absorb it with limited ratings impact,” said S&P credit analyst Franck Delage.

UAE property market set to decline, says S&P

AFP, DUBAI: The UAE property market is set for a soft correction after three years of sharp rises but a crisis is ruled out, Standard Poors ratings agency said on Monday. A report said additional supply and lesser demand on the United Arab Emirates property market his year is likely to result in a 10-20 per cent correction in Dubai residential real estate prices. The SP report stressed this would be much less than the 2009 bubble. The diversifying economy, positive demographics, and protective measures from local regulators should help prevent a crisis like that of 2009, SP said. Stronger capital structures and good revenue mixes should allow issuers to withstand headwinds over the next 12-24 months, the report added. The agency said that after reaching a peak last year, the UAE property market will soften in 2015 and early 2016. The market is facing a turnaround in operating conditions that is likely to dampen performance, said S$P, adding that the sharp decline in oil prices will markedly impact UAE economic growth. We believe real estate companies in the UAE are better armed to deal with the current slowdown and should be able to absorb it with limited ratings impact, said SP credit analyst Franck Delage.