S&P Global expects strong sales growth, which encourages the launch of new projects
30 thousand new housing units in Dubai during 2022
Expectations to continue the high demand for deals in the residential real estate market in the emirate in 2022. Archive
The global credit rating agency, S&P Global, expects 30,000 new housing units to enter the Dubai real estate market this year.
The agency indicated in a recent report issued yesterday, that the new units will calm the pace of the rise in residential real estate prices and rents, despite inflation and the rise in building materials prices.
The report indicated that Dubai real estate prices are still at acceptable levels, despite the increase they witnessed last year, but they are still lower, ranging between 25-30%, compared to the high levels reached in 2014.
The report expected a limited increase in the emirate's real estate prices and rents this year, as well as a strong growth in sales volumes, which would encourage companies to launch new projects.
The agency predicted an acceleration in the revenue growth of real estate development companies in the emirate during the next four to five years with the growth of demand.
She expected that the rise in oil prices would contribute to boosting the levels of demand for Dubai real estate by the countries of the Gulf Cooperation Council.
She said that global geopolitical tension could contribute to enhancing Dubai's reputation as a safe haven and give an additional impetus to demand for real estate in the emirate.
The agency suggested that the demand for volumes of transactions in the residential real estate market in the emirate will continue this year, and in the demand for off-plan properties, with the demand for villas outperforming apartments.
She also expected that new project announcements would continue this year, especially at the level of villa development to meet the growing demand.
The agency said, "Dubai's economy grew at a rate of 3.5% last year, and the retail sector was able to recover, and the number of visitors to the emirate increased remarkably, especially in the last quarter of 2021, with the support of hosting (Expo Dubai)."
She pointed out that the emirate's GDP is expected to grow at a rate of 2.5 percent this year, and about 2 percent next year.
The emirate's population is also expected to increase by 2% in the current and next year, pointing out that this growth with the rise in international oil prices will support the growth in demand for Dubai real estate during the period.
The agency said that "the commercial space available for leasing will increase by 11% this year, including (Emaar's Hills Mall), which was opened last February."
The agency expects a limited decline in the rents of commercial units during the current year, with the continuation of the initiatives of shopping centers and the incentives that it provides to maintain tenants, and expects to maintain this year at strong retail sales levels.
The agency suggested a stable rise in hotel occupancy levels and the average price of a hotel night in the emirate during the first half of this year, compared to the same period last year.
She said that this year it is expected to increase the focus on domestic tourism with attractive deals for accommodation, and pointed out that the emirate's hotels are candidates to take advantage of the concept of remote work, and that a new supply is expected to enter the market this year, adding 10% of the existing hotel spaces.
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