Dubai Real Estate Market Set to Cool Amid Global Economic Pressures, S&P Report Reveals

Dubai, UAE – S&P Global Ratings has forecasted a cooling trend in Dubai’s residential property market over the next 12-18 months, citing increased supply and global economic pressures affecting demand. Despite this, the report highlights that developers in the emirate have bolstered their financial positions thanks to record pre-sales over the past three years, which have improved their credit health ahead of the anticipated cyclical slowdown.

The report indicates that more than 85% of GCC-rated real estate companies have a stable outlook, suggesting expectations of a steady operating performance. S&P notes that almost two-thirds of its portfolio is exposed to Dubai real estate, where stable outlooks (with only one positive) indicate limited upside potential in the next 12 months in light of the expected cyclical slowdown.

In contrast, Abu Dhabi’s residential real estate market has not experienced the same rapid appreciation as Dubai’s. Consequently, the market in Abu Dhabi has not yet reached its previous peak cycle, suggesting a lower risk of reversal, according to the report.

The report’s findings underscore the dynamic nature of the real estate sector in the UAE and the importance of developers maintaining financial resilience in the face of evolving market conditions.