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Dubai has “necessary credit” to handle property market slump

Sep
28
2015
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Despite significant price declines, Dubai's property market can weather the storm, according to a new report.

Although Dubai's property market is undergoing a correction, it has "sufficient headroom in its credit ratios" to handle the slowdown.

This is according to Standard & Poor's (S&P), which predicts that the residential property sector in the emirate will fall between 10% and 20% year-on-year in 2015.

It notes that slowing economic growth in the UAE will limit demand from non-residents and investors, while additional supply will flood the market.

While this isn't positive, S&P explained that the real estate entities that it rates are "better armed and show sufficient headroom" in their credit ratios to weather the current market conditions.

A separate report from Knight Frank claims that Dubai's property market "stands tall" among other capital cities across the globe, despite a significant decline in prices.

“Looking into the city’s sub-markets, the picture is a bit more positive as well. In-demand areas are mostly in the prime segment including villas, townhouses and apartments in the Palm, Emirates Hills, Dubai Marina and Downtown, for example," noted Diaa Noufal, MENA Research at Knight Frank Dubai.

The report claims that other regional markets are trying to emulate the emirate's rapid development and carve out their own share of the inbound flow of global private wealth.

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