Dubai’s realty decline not as steep as in 2009
Projection by S&P suggests that developers are much better placed than they were years ago.
Dubai: The current decline in Dubai’s property values could extend to an up to 20 per cent drop from their 2014 peaks, but still far removed from the bottom reached during the 2009-11 crisis years.
The projection, by the credit rating agency, S&P should give some cheer to investors and developers who have seen steady erosion in values – and demand – since the beginning of the year. Their concern has been that with more launches expected in the second-half of the year, it could create a glut in the marketplace of unsold properties if demand does not rise proportionately.
But the S&P report suggests that developers are much better placed than they were in 2009, when the enormity of the decline in demand took them completely off-guard. Also, both developers and buyers were over-leveraged, which is not the case today.
‘Real estate companies are better armed to deal with the current slowdown and should be able to absorb it with limited ratings impact,’ the S&P report said.