Experts Shrugs Off Fears of Major Crash in UAE Real Estate
Despite the apparent slowdown in the UAE's real estate market, experts shrugged off rumors that the country's property sector was heading towards a major crash.
David Dudley of the real estate consulting firm Jones Lang LaSalle (JLL), in a report published by Trade Arabia, said the current situation happening in the UAE's property market should not be construed as an indicator of a major crash, but rather just a minor correction. The relatively low availability of supply helped balance off the easing demand, which gave the emirate's housing market an opportunity to recuperate.
While there's an apparent and continued devaluation of oil prices across the Gulf region, according to Dudley, it would be a perfect time for the market to stabilize. Since the undersupply came amid a low market demand, Dudley said there's a higher chance that it's not going to have a major negative impact on the market.
"The market experienced a major upswing from 2013 to 2014, led by the residential sales market, with prime residential prices growing at 25 percent per annum. This pace of growth was unsustainable," Dudley was quoted as saying by Trade Arabia.
Dudley added that the current situation in the UAE's property market also indicates a maturing market, which also opens a lot of opportunity for growth and improvement. Investors could actually take advantage of the current trend in the UAE's real estate market in maximizing their services to their clientele, he added.
"While liquidity has tightened, funding is still available for project finance and corporate level lending—it is just more selective," Dudley said, adding that the demand for projects that commenced before oil prices plummeted continued to improve.
According to a separate report published by OPP Today, the major real estate improvement recorded in UAE between 2013 and 2015 was led by the country's housing sector with a staggering 25 percent annual increase.