Dubai : The real estate companies operating in the UAE are facing major challenges that have slowed down their profits and revenue in the first quarter of 2019, economists told Mubasher.
Net profit of the real estate companies in the Emirati markets amounted to AED 3.12 billion in Q1-19, down 19% from AED 3.86 billion in the year-ago period, according to Mubasher statistics.
Union Properties the top decliner in terms of quarterly profits which plunged 99% to AED 1.7 million, followed by Damac Properties that posted a 94% drop in profits for Q1-19 and recorded AED 31.1 million, statistics showed.
Total revenue of the UAE’s property firms retreated by 5.34% to AED 12.23 billion in the three-month period ended 31 March, compared to AED 12.92 billion in Q1-18.
Emaar Properties has reported the largest profits in Q1-19, which reached AED 1.74 billion on the back of a growth in its revenue that totaled AED 5.89 billion.
Supply and demand
Experts told Mubasher that there is no balance between supply and demand in the UAE real estate markets, projecting the companies to begin reviving in line with the implementation of Expo 2020 projects.
The real estate firms are expected to see solid performance when oil prices recover, the government cut fees and provide global services at attractive prices and returns to foreign investors, they clarified.
The six-month Expo 2020 will be hosted by Dubai from 20 October 2020 through 10 April 2021. The World Expo is a universal exposition organised every five years.
Moreover, he projected the UAE’s real estate sector is expected to recover as of the second half of 2019.