The UAE appears to have benefited from its safe haven status in the first quarter. The tourism and logistics sectors performed strongly, with airlines operating at near-capacity, hotels reporting above-average occupancies, and malls attracting record numbers of shoppers.
But the full financial statements for Emaar Properties show the sector is lagging behind. Emaar delivered only 270 properties in Dubai in the first quarter this year, compared with 1,300 villas and apartments in the same period last year, including those in the Burj Khalifa.
Revenue from apartment sales fell 81 per cent to Dh346 million, compared with Dh2 billion last year. Villa sales fell 49 per cent to Dh60m.
Investors reacted to the news negatively yesterday as property stocks fell the most on the local bourses.
"In this context, over the medium term we continue to prefer to play the Abu Dhabi names over Emaar on an expected pickup in deliveries, earnings per share and improving liquidity positions," said Majed Azzam, an analyst at Alembic HC Securities in Dubai.
The Alembic HC transaction index indicates a 16 per cent decline in volumes in the first quarter compared with the first quarter of last year. But in the past six months, agreed prices in Dubai appear to have stabilised at about Dh9,000 a square metre.
As these prices are considered close to average construction costs on a net sellable area basis, the market may have found a floor, Mr Azzam said.
In the first quarter agreed prices were up 3 per cent compared with the first quarter last year, but asking prices continued to fall, dropping 14 per cent.
In Abu Dhabi, asking prices fell 6 per cent, Mr Azzam added.