According to a recent sector in-depth study by Moody’s Ratings, the UAE’s real estate industry is experiencing tougher conditions due to geopolitical risks and fading post-boom momentum. However, developers remain in a stronger position than in past eras.
Moody’s predicts a cyclical cooling in the home market as population growth normalizes and off-plan construction reaches completion in the coming years. Increased regional security hazards have had an influence as well.
According to data from the Dubai Land Department, transaction volumes for completed units declined by approximately 51% in March and April compared to January and February averages. Off-plan sales have reduced, although no significant demand freeze has occurred yet. Instead of lowering headline prices, developers have responded by offering more flexible payment arrangements, according to Moody’s, which helps maintain sales momentum while not hurting asset values.
Despite the drop in demand, Moody’s said the UAE developers it grades, Emaar, Damac, Binghatti, and Arada, are “better positioned than in prior cycles,” thanks to solid revenue visibility, large presale backlogs, and conservative balance sheets. Many rated developers have years of revenue secured at their current operating scale, limiting short-term exposure to market instability.
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