The recovery of the UAE property market to pre-crisis levels could take up to two years, an executive at Dubai-listed developer Damac Properties PJSC said.
The recovery of the real estate market “will be a long one, perhaps 12 to 24 months”, Amira Sajwani, senior vice president at Damac, was cited as saying by the Zawya news site. “Property prices have dropped, and we are expecting further declines over the final quarter of 2020 and into 2021.”
The impact of Covid-19 and a likely reduction in the UAE population will hamper the revival, she said.
Damac’s chairman, Hussain Sajwani, has been advocating for a moratorium on construction in Dubai, where a property glut has driven home prices down by more than 30 percent since 2014.
The government was forced to set up a committee to manage supply and demand as some of the city’s largest developers continued to build.
Now, it seems many are coming around to accept the need to halt new building. After resisting calls to stop, the head of Dubai’s biggest developer Emaar Properties, Mohamed Alabbar, earlier this month said his company had paused all new construction temporarily.
Last month, Sajwani said Damac Properties is pinning hopes on next year’s Expo event to reinvigorate the real estate market after his company posted losses of AED931 million for the first nine months of 2020.
This compared to a net profit of AED133m for the same period last year. The developer said total revenue rose to AED3.7 billion vs AED2.8bn in the first nine months of last year while booked sales for the period stood at AED1.6bn, down on the AED2.4bn posted for the similar period last year.
Profit continues to be adversely impacted due to provisions created in light of prevalent market conditions, the developer added.
Damac said it delivered 1,870 properties in first nine months of the year in its Akoya and Business Bay developments.
Residential real estate prices in Dubai continued to fall but at a slower pace during the third quarter of 2020 as a result of oversupply and subdued demand, according to the UAE’s Central Bank.
CBUAE said in its quarterly economic review for Q3 that average property prices dropped by 0.9 percent year-on-year, citing data from Dubai Land Department.
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