COVID-19 to further decrease UAE home sales, rental prices - Moody's | ZAWYA MENA Edition:
The real-estate sector in the UAE is reeling from the dual economic impacts of coronavirus and the oil price decline, eroding credit quality for most.
The sector, which had already slowed down significantly over the past five years, will see further decreases in home sales and rental prices over the coming 12 to 18 months, Credit rating agency Moody’s said in its July in-depth sector real estate report.
Dubai will feel the impacts particularly, due to the emirate’s reliance on tourism and transportation, it said.
The combination of the pandemic and the slump in oil prices will contribute to the erosion of the non-oil economy by impacting foreign investment and economic confidence.
Gross profit margins of homebuilders such as Emaar Properties and Damaac will continue to weaken as job losses and salary cuts curb buyer demand for new properties, with travel restrictions also reducing international demand.
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