Page 83 - SOBHA REALTY PR REPORT NOVEMBER 2023

The property market, which has evolved over the past decade, has two distinct
types of buyers. The first is UAE-based residents for whom affordability has
weakened as property prices have risen, coupled with higher inflation and

interest rates. The second investor type includes high-net-worth purchasers or
millionaires who continue to support off-plan demand, some of which are based

in the UAE.

“Most of these are cash buyers who are less sensitive to inflationary pressures
and rising interest rates as compared to mortgage-financed buyers. The

proportion of cash buyers has increased considerably in the last two years,
benefiting from the UAE’s reputation as a safe haven,” it said.

For example, according to Moody’s, nearly 60 per cent of Sobha Realty’s total

sales in 2022 were to non-UAE residents, most of whom were cash buyers. On
the other hand, UAE-based buyers make up the bulk of development sales for
Aldar in Abu Dhabi and more than half for Emaar Properties in Dubai.

UAE homebuilders continue to launch new projects, with demand even stronger

than before the pandemic. New supply is steadily increasing as around 80,000
units

are under construction this year in Dubai and Abu Dhabi, according to real estate

data companies Reidin and JLL.

Global ratings agency Moody’s expects homebuilders margins will also improve
in the next 12-18 months.

“A number of developers have launched new projects in the past 18 months and
off-plan sales have picked up significantly since. This has led to a significant

increase in revenue backlogs across the board for developers,” Moody’s said,
adding that the launch of new projects, coupled with the increase in demand, has

led to an increase in gross margins across the board.

“UAE-based homebuilders are in a good position to capitalise on the growth
opportunities in their domestic market. We expect leverage and Ebit to interest

https://www.msn.com/en-ae/news/featured/dubai-heres-why-property-prices-will-continue-to-rise-in-
2024/ar-AA1kxXjB