Zawya, 13 November, 2018
The long-running slowdown in Dubai’s residential real estate market will continue next year, but is expected to recover by “end of 2020 or (20)21”, Hussain Sajwani, chairman of Dubai’s Damac Properties said on Monday.
Speaking at a press conference on Monday during the World Economic Forum’s Global Future Councils event, Sajwani said that the real estate market has been undergoing a slowdown since 2016 after a prior good performance in the period from 2012 to 2015.
“We had good four years, at the (20)16 we started seeing some slowdown with the oil prices coming down. But this year has been a difficult year. I think next year is going to be another difficult year, I don’t see it is going to be better than this year,” Sajwani said
“We are in that cycle of slowdown. It will take few years. I hope that by 2020 with the Expo coming in, more people are going to come to Dubai…. I would hope by end of 2020 or (20) 21 we start coming out of this slowdown,” he added.
Damac Properties reported a 46 percent drop in its second quarter profit from continuing operations to 378 million United Arab Emirates dirhams ($102.9 million) for the second quarter of 2018, despite a 14 percent increase in Q2 revenue to nearly 1.79 billion dirhams. Profit for the first six months of the year was also 46 percent lower at 862.1 million dirhams.
The economy of the UAE and other Gulf Arab states were impacted by a sharp drop in oil prices that started in late 2014 and continued until 2016. Oil prices started to improve gradually since then, but property prices have been on a downward trajectory since mid-2015 due, at least in part, to concerns about increased supply. According to JLL MENA’s Q3 Dubai report, average sale prices for apartments fell by 7 percent and villa prices fell by 8 percent year-on-year, and gave a 12-month outlook forecasting further declines. It cited Dubai Land Department figures stating that during the quarter, residential sale transactions (excluding land) dropped by 32 percent to 12.3 billion dirhams.
Sajwani said he was confident that Dubai will manage to attract more visitors and residents, especially Chinese tourists.
Chinese President Xi Jinping visited the UAE in July, during the first annual UAE-China Week. The number of Chinese tourists to visit the UAE increased by 41.4 percent in 2017, Emirates News Agency, WAM, reported in July. Visitor numbers were boosted last year by the fact that rules were changed to grant Chinese tourists a visa on arrival into the UAE from November 2016.
“I genuinely believe Dubai is a hidden jewel and a lot of people around the world still want to come to Dubai and love it,” Sajwani said.