Dubai apartment prices could fall further over the next two years as housing supply is set to rise by around 20 per cent, especially in the apartment segment, S&P Global said.

Specific segments of Dubai's residential market are already experiencing price corrections, which the credit ratings agency attributed to the country's sweeping visa reforms that supported a higher number of long-term investors.

Disruptions stemming from the regional war are assumed to continue into next year, as per S&P Global Rating's base case scenario. This, along with new deliveries due in 2027-2028, could accelerate the price correction, especially in investor-driven apartment segments, the agency said.

Property developers like Damac, Emaar, Omniyat, and Sobha Realty, all four companies that S&P Global rates, have large revenue backlogs and limited payment delinquencies, which support the ratings.

Additionally, long-term property buyers, regulatory enhancements, and government support are the main reasons behind residential real estate prices declining only moderately since the war began seven months ago.

Earlier this year, the government introduced off-plan mortgages, which require a 50 per cent maximum loan-to-value ratio and a minimum 50 per cent upfront payment, to help improve developers' liquidity and buyers' payment tenures.

(Source: Khaleej Times)