Dubai real estate market may bottom out next year, S&P says

[DUBAI] Property market in Dubai may "bottom out" next year after weathering a tough 2020, according to S&P Global Ratings.

"We already had a supply and demand imbalance in the market even before the pandemic, and after Covid-19 the situation just got worse," S&P analyst Sapna Jagtiani told Bloomberg TV on Tuesday. Prices of residential and office spaces in the city are expected to "somewhere bottom out in 2022," she said.

A property glut and faltering demand in the Middle East's business hub have driven prices down by more than a third since the market peaked some seven years ago. The decline has been made worse by the coronavirus pandemic.

Property broker JLL said in January that Dubai developers are likely to continue a high supply momentum this year, an increase that means two more years of price declines. The chief of Damac Properties PJSC, one of Dubai's largest developers, said last month it will take at least one to two years for the real estate market to get out of its downturn.

Dubai has suffered the steepest population shrinkage in the Gulf last year, while its gross domestic product contracted around 11 per cent, according to S&P estimates.

BLOOMBERG