Next 12-18 months crucial for Dubai real estate

BY FAKHR AHMAD: Dubai’s residential property market is expected to cool over the next 12-18 months due to increased supply and global economic pressures affecting demand, S&P Global Ratings said in a new report, quoted by by Zawya.

Reported by zawya.com, developers in the emirate have beefed up their cash balances due to record pre-sales over the past three years, improving their credit health ahead of the next cyclical slowdown, the report stated.

According to S&P, more than 85% of GCC-rated real estate companies are on a stable outlook, indicating the expectation of a steady operating performance.

“Close to two thirds of our portfolio is exposed to Dubai real estate, where stable outlooks (only one positive) indicate limited upside potential in the next 12 months, given our expectation of cyclical slowdown.”

In contrast, Abu Dhabi’s residential real estate market has not experienced the same rapid appreciation as Dubai. Consequently, the market in Abu Dhabi has not yet reached its previous peak cycle, suggesting a lower risk of reversal in comparison, the report said.