The slowdown in Dubai’s real estate market shouldn’t be a worry for long-term investors, according to a top global ratings agency.
Moody’s Investors Service states the slowdown is, in fact, “positive in the long run” and alleviates the “potential overheating”, though prices could fall 10 to 15% in 2015.
“We believe that the slowdown in Dubai's real estate market is positive in the long run, as it gives the market time to absorb the existing supply pipeline, while also alleviating our concerns about the housing market potentially overheating,” the agency said.
“A less volatile market is beneficial for all stakeholders and will help developers plan their future pipelines in line with real demand, while at the same time acting to dis-incentivise speculators from ‘flipping’ off-plan units in order to generate a quick gain.”
In the report, Moody’s expects prices to soften in the suburbs due to supply pressure as small developers launch projects, Emirates 24/7 reported.