By: Mahmoud Gamal

Dubai – Mubasher: The UAE real estate sector is facing five key challenges that affect its profits, namely oil prices, supply and demand forces, mortgage rate, rent revenues, and foreign exchange rate, analysts told Mubasher.

The Emirati real estate market is still active, given the completion of a group of projects with many others in the developers’ pipeline, chief market analyst at Century Financial Brokers Vijay Valecha said.

However, Middle Easterns’ demand for Emirati properties dropped due to the decline in oil prices in the last few years, Valecha added.

Also, we cannot ignore the impact of the increase of mortgage rates and the US interest rates on the sector, the analyst revealed.

The real estate stocks in the UAE markets, including Emaar Properties, Emaar Malls, Damac Properties, and Aldar Properties, will maintain their negative performance until 2019, Valecha remarked.

Valecha stated that Damac is expected to report a decline in net profit, adding that investors should avoid the UAE entire property sector until some market-boosting incentives emerge.

The UAE developers may post negative disclosures, as the sector became less active and the value of both rents and sales levelled down, capital markets director at FFA Dubai Marie Salem.

Translated by: Muhammad Khalid