UAE’s strong rebound seen to underpin real estate buoyancy

UAE’s strong rebound seen to underpin real estate buoyancy

The rating agency said homebuilders’ credit quality will improve, benefiting from strong demand in the off-plan market

Off-plan property sales will remain high for Emaar Properties and Aldar Properties, with positive investor sentiment supporting solid demand, especially for high quality projects. — File photo

Published: Tue 13 Sep 2022, 6:00 PM

Buoyancy in the UAE property sector is likely to be underpinned by a strong economic recovery led by hike in oil production, higher energy prices and a rebounding services sector, though threats to this scenario are rising, analysts at Moody’s Investors Service said.

"We forecast the UAE’s real GDP growth of six to seven per cent in 2022 and the credit quality of UAE real estate companies we rate to remain broadly stable in the next 12-18 months," said Lahlou Meksaoui, vice-president and senior analyst at Moody's.

"However, more dangerous waves of Covid-19, higher inflation, rising interest rates exacerbated by the Russia-Ukraine conflict, and fears of recession in US and Europe pose risks to the economic recovery."

Despite these risks, the country's management of the pandemic and introduction of new residency visas had already led to a rebound in the labour market, a key housing demand driver.

The rating agency said homebuilders’ credit quality will improve,