#Dubai real estate recovery 'fragile' and uneven, S&P says | Reuters

Dubai real estate recovery 'fragile' and uneven, S&P says | Reuters

Dubai real estate prices have rebounded strongly from a record low at the end of 2020, but demand is uneven and oversupply of residential properties will pressure prices in the long run, making the recovery fragile, S&P Global Ratings said.

Real estate investment firm CBRE Group said last week that average residential property prices in Dubai rose 4.4% in the 12 months to August, the highest annual growth since February 2015, but an ongoing fall in apartment rents signalled continued weakness in the long-troubled sector.

"The rebound in demand for residential real estate has largely benefited premium developers with a surge in pre-sales and price improvements," S&P said.

It said market data showed that apartments, which make up 85-90% of properties, experienced a price increase of about 6% in the second quarter. The rates for villas have also accelerated while rents for apartments are still lagging.