Dubai residential prices could fall by up to 10% in 2019: Savills

Visitors look at a scale model of one of the planned development projects in Dubai during the emirate’s property show Cityscape on October 2, 2018. (AFP)
Updated 07 January 2019
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Dubai residential prices could fall by up to 10% in 2019: Savills

  • Dubai’s over-supplied property market has steadily fallen since a mid-2014 peak
  • The United Arab Emirates, which Dubai is part of, is experiencing its latest real estate slump along with other parts of the Middle East

DUBAI: Residential real estate prices in Dubai could fall by 5 to 10 percent in 2019, weakened by new supply, a strong dollar and lower oil prices, the Middle East chief executive of Savills said on Monday.
Dubai’s oversupplied property market has steadily fallen since a mid-2014 peak, hurting earnings of the emirate’s top developers and forcing construction and engineering firms to cut jobs and halt expansion plans.
While the latest fall in house prices has not come close to the more than 50 percent plunge seen in 2009-2010, which pushed Dubai itself close to a debt default, residential prices fell by 6 to 10 percent in 2018, Savills’ Steve Morgan said.
And this drop could be repeated in 2019, he added.
The United Arab Emirates, which Dubai is part of, is experiencing its latest real estate slump along with other parts of the Middle East, largely due to oversupply, although a strong dollar and lower oil prices are also a factor.
The UAE dirham is pegged to the dollar, making the country more expensive for those holding other currencies, while oil is a major driver of regional wealth.
Morgan said he was “bullish” that Dubai was heading toward the bottom of its property market downturn, although cautioned he had thought the market touched bottom a year earlier.
S&P Global Ratings’ analysts said last year the market could decline by 10 to 15 percent in 2018 and 2019 before stabilizing in 2020 at the earliest.


World leaders prepare for Davos amid gloomy forecasts

Klaus Schwab, founder and executive chairman of the World Economic Forum. (AFP)
Updated 6 min 49 sec ago
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World leaders prepare for Davos amid gloomy forecasts

  • Delegates to annual forum to include presidents of Iraq and Afghanistan

DUBAI: World leaders are preparing to head to the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, amid the riskiest global backdrop in years, according to a report from the event organizer itself.

As the WEF announced the names of some of the 3,000 participants set to attend the meeting and details of the four-day agenda, it also published a gloomy outlook on international politics, economics, the environment and technology. 

Rising geopolitical and geo-economic tensions are the most urgent risks in 2019, with 90 percent of experts surveyed expecting further economic confrontation between major powers, according to the WEF’s annual Global Risks Report.

“The world’s ability to foster collective action in the face of urgent major crises has reached crisis levels, with worsening international relations hindering action across a growing array of serious challenges. Meanwhile, a darkening economic outlook, in part caused by geopolitical tensions, looks set to further reduce the potential for international cooperation in 2019,” it added.

Although political and economic worries were top of the immediate agenda for the 1,000 experts polled by the WEF, the environment and climate change are also a cause for concern, as are “rapidly evolving” cyber and technological threats, the WEF said.

Børge Brende, the WEF president, said: “With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation. We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us toward. What we need now is coordinated, concerted action to sustain growth and to tackle the grave threats facing our world today.”

The leaders who will begin to arrive in Switzerland in the next week include Shinzo Abe, prime minister of Japan; Jair Bolsonaro, president of Brazil; Angela Merkel, chancellor of Germany; and Wang Qishan, vice president of China.

With US President Donald Trump pulling out of the meeting to deal with the partial government shutdown, the American delegation is expected to be led by Steven Mnuchin, Treasury secretary, and Mike Pompeo, secretary of state.

The Middle East is well represented at the meeting, with at least nine heads of state or government from the region, including Palestine, Iraq, Egypt, Jordan and Lebanon. Saudi Arabia will be represented by a team of senior policymakers and business leaders.

The risk report will give them all food for thought in the Alpine resort.

Asking whether the world is “sleepwalking into a crisis,” the report responded: “Global risks are intensifying but the collective will to tackle them appears to be lacking. Instead, divisions are hardening. The world’s move into a new phase of strongly state-centered politics continued throughout 2018.

“The idea of ‘taking back control’ — whether domestically from political rivals or externally from multilateral or supranational organizations — resonates across many countries and many issues.”

Macro-economic risks have moved into sharper focus, it said. 

“Financial market volatility increased and the headwinds facing the global economy intensified. The rate of global growth appears to have peaked,” the report said, pointing to a slowdown in growth forecasts for China as well as high levels of global debt — at 225 percent of global gross domestic product (GDP), significantly higher than before the financial crisis 10 years ago.

Raising the prospect of a “climate catastrophe,” the report said extreme weather, which many experts attribute to rapid climate change, was a risk of great concern. “The results of climate inaction are becoming increasingly clear,’ the WEF said.

Of the 3,000 participants at Davos, which runs from Jan. 22 to 25, around 78 percent are men, with an average age of 54. 

The oldest will be the 92-year-old British broadcaster David Attenborough, the youngest 16-year-old South African wildlife photographer Skye Meaker.