A three-year downturn in Dubai's property market will likely continue until at least 2020, Standard & Poor's said Tuesday (February 20th).
A glut of housing units and weak demand were also key reasons for the decline, the credit ratings agency said in a report.
The emirate's real estate sector has been on the slide since 2014, when crude oil prices crashed, dealing a harsh blow to many Gulf investors, AFP reported.
Home prices dropped more than 15% between then and mid-2017. The downward trajectory continued through the end of last year, the S&P report said, with prices of residential units falling a further 5 to 10%.
It said the introduction of a value added tax (VAT) and a prolonged crisis between Qatar and its Gulf neighbours, including the UAE, had also put pressure on real estate prices.
S&P said the sector may start to bounce back when Dubai hosts a six-month World's Fair in 2020.
Dubai's Expo 2020 is expected to attract up to 300,000 visitors a day when it opens in October 2020.
Experts have predicted it will also create around 300,000 new jobs and attract new residents in the emirate city, which currently has a population of three million.
Dubai is slated to spend some $7 billion on infrastructure projects and $2.9 billion on the expansion of the metro route to the exhibition between now and the event's inauguration.
The property sector and related activities form around 13% of Dubai's GDP, which was $108 billion at the end of 2017.
Between December 2015 and June 2017, overseas investors put up as much as $41 billion to purchase property in the emirate, said the Dubai Land Department in August.
Succinct, but to the point.
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