Damac reported a second quarter net loss of $76m
Damac Properties PJSC expects a “difficult” period of as many as two years for Dubai’s property market as the impact of the coronavirus drags real-estate prices down.
“Travel restrictions impacted the economy and the real estate sector and we will see a difficult market for the coming 18 to 24 months,” chairman Hussain Sajwani said in the company’s earnings release.
“However, we are optimistic that the lead up to the Dubai Expo at the end of 2021 will allow some of the excess real estate supply be absorbed,” he said.
The coronavirus aggravated a long property slump in Dubai, where oversupply and economic uncertainty pushed down prices for years. Real estate prices will drop further in the coming months amid subdued demand, S&P Global Ratings and Moody’s Investors Service said in July.
Sajwani also said Damac remains aligned with the government’s strategy to create a “healthy balance between supply and demand in the market by having no new launches to avoid adding new commitments. Our focus remains on selling completed and near completion inventory.”
Damac reported a second quarter net loss of AED280.6m ($76m), down from the AED50m ($13m) profit it reported in the same quarter last year.
Damac said profit “was adversely impacted due to prevalent market conditions and resultant provisions”. Revenues for the for Q2 were AED1.1bn, an increase of 17% on the previous year.