Arabian Business, 21 November, 2018
Real estate markets in the Gulf are expected to remain under pressure during 2019, with supply demand imbalances likely to hit Dubai hardest, S&P Global Ratings has said in a new research note.
The ratings agency said GCC real estate markets in 2019 are not expected to fare any better than in 2018, wrought with political uncertainties, supply demand imbalances, economic slowdown, and lower population growth.
On the flipside, S&P said it expects higher oil prices to reduce fiscal pressures and some of the GCC governments have announced measures to support the real estate sector.
Abu Dhabi has also announced AED50 billion ($13.6 billion) economic stimulus for business owners, real estate sector, and tourism among other areas over the next three years.
On the region’s tourism prospects in 2019, S&P added that it expects to see lower average daily rates (ADRs) for hotels as supply continues to increase faster than demand, notably in Dubai.
“We also anticipate pressure on retailers and retail real estate in the short term, with the introduction of VAT, growth in online shopping, and tourists becoming more cost sensitive, with Dubai’s Expo 2020 and Qatar’s Soccer World cup 2022 providing a boost to the sector over the medium term,” the research note added.