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The UAE’s real estate market is expected to witness a slowdown in price increases, dropping by nearly 10% by the end of 2024, according to S&P Global Ratings.
Speaking at a media roundtable, Tatjana Lescova, Associate Director at S&P Global Ratings spoke about the outlook of the UAE’s real estate sector and the upcoming supply inventory that will impact the market.
“If you look at the real estate sector today, the first three months of the year [2024] saw double digit growth compared to last year and the prices are continuing to rise. So, we generally think prices will increase on a full-year basis at [the rate of] 5% to 7% this year,” she said. “But this also points towards a deceleration in growth because prices in 2023 increased by almost 15%.”
Lescova added that they expect demand to slow down as well in 2024, “leading towards an eventual turn in the cycle.”
“Businesses coming here will sustain the current trend for some time before the bulk of the new supply, coming in in 2025 and 2026, could result in a shift,” she continued. “So, if you ask whether a slowdown in the real estate sector will come in Q4 2024, it’s hard to point that out, but we think generally it will slow down coming over the next 12 months.”
Lescova also spoke about the impact of the recent UAE floods on the real estate market, saying “it was too early to judge.”
“I think this month [April] will see a dip in transactions, following the impact of the floods, but the long-term impact would greatly depend on the reputation of the development. But if you echo people’s experiences from different areas, this can have an impact on prices potentially,” she said.
(Reporting by Bindu Rai, editing by Seban Scaria)
