S&P sees Dubai property prices dropping to levels seen in 2010

The widening coronavirus pandemic could see Dubai property prices falling to levels last seen 10 years ago, according to S&P Global Ratings.

“We believe real estate prices are approaching levels seen at the bottom of the last cycle in 2010, and are even lower on an inflation-adjusted basis and considering sales incentives for off-plan property,” S&P Global Ratings said in a report.

“We also expect negative employment trends across some key sectors such as tourism and retail, as well as for certain small and midsize enterprises, which could weigh on demand for new properties.”

S&P rating action:

* Emaar Properties and Emaar Malls’ BBB- ratings on creditWatch with negative implications

* Damac Real Estate lowered to B from B+; outlook remains negative

* Unlisted DIFC Investments’ revised to negative outlook from stable; affirms BBB- ratings

“Dubai may at some stage see widespread temporary closures of business, similar to that in other regions, or work stoppages, including at construction sites, which could lead to delays in future residential property deliveries,” according to S&P.

“This would increase working capital funding gaps for developers, including Emaar Properties and Damac Real Estate.”