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Dubai Population Drop to Hit Housing Demand, Says UBS
(Reuters) / 16 January 2009
DUBAI - Dubai’s population could fall 8 per cent this year as a global downturn hits its once-booming real estate sector, curbing housing demand and revenues of major developers, UBS said in a research note.
A slowdown in the real estate sector, which employs half of
“A slowdown in the housing market in addition to challenging macro-conditions may lead to fewer foreign workers moving to the region for job opportunities and fewer investors engaging in local investments including real estate assets,” analyst Saud Masud said in the note.
“This would likely lower net demand growth for property and may actually create incremental headwinds should there be net population outflows,” he wrote.
Excess supply in the property market was seen reaching 27 per cent — or 87,000 units — by the end of 2010, Masud wrote. UBS expects revenues for Emaar Properties in 2009 and 2010 to reach Dh20.47 billion and Dh20.66 billion respectively. Revenues for Union Properties would reach Dh4.39 billion and Dh5.42 billion respectively, the note said. “Clearly should this scenario play out there would be sustained and possibly incremental pressure on house prices,” Masud wrote.
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