DUBAI (Reuters) - Dubai's property sector is expected to weaken further as the coronavirus pandemic's impact exacerbates oversupply, credit ratings agency Moody's said in a report on Monday.
Moody's said it expected the pandemic to further slow home sales and lower rental prices in a market that was still suffering from persistent imbalances.
Dubai has faced a slowing real estate market for most of the past decade. Moody's said the sluggish sector had been further hurt by a flurry of construction ahead of the Expo 2020 world fair, which has been delayed by a year to next October.
Moody's said Dubai property developers "face further market weakening as job losses and salary cuts curb local buyer demand for new properties and travel restrictions reduce international demand".
The coronavirus crisis has brought to a near standstill vital sectors of the Middle East business and tourism hub.
The emirate's economy shrank by 3.5% year-on-year in the first quarter, the government's media office said on June 30.
S&P Global Ratings earlier this month downgraded Emaar Properties, builder of the world's tallest building, Dubai's Burj Khalifa, to a BB+ "junk" rating from an investment-grade BBB- score, saying it expected a 30%-40% slump in the firm's earnings this year.
Moody's said, however, that real estate companies in the emirate of Abu Dhabi, the capital of the United Arab Emirates "where there is less of an imbalance between residential supply and demand", would see less severe headwinds from the coronavirus.
(Reporting by Hadeel Al Sayegh; Editing by Alex Richardson)