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Why more UAE homeowners and renters expect property price to rise in the next 12 months

Posted by Patrick Torres on 2 March, 2021
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Investors seizing the opportunity in the current real estate market are behind the improved sentiment in the UAE real estate market, said a chief economist.

The real estate market has been at a low as coronavirus wiped out markets globally, but while prices remain low now, there is an expected boom ahead.

Christopher Payne, chief economist at investment and research company Peninsula, explained that it is “not unreasonable” to think the market cycle has reached near bottom, given prices have fallen by around 10 percent in 2020.

Christopher Payne, chief economist at investment and research company Peninsula

“Investors, whether in equity, real estate or any other markets, always look for inflection points in market cycles. No one wants to miss out on the bottom,” said Payne.

Peninsula’s Home Sentiment Survey, which measured consumer sentiment towards the residential property market at the end of Q4 2020, indicated that 53 percent of respondents said they are expecting prices and rents to stabilise or go up in the next year, a sharp turnaround from October when only 31 percent were bullish on price increases.

Only 27 percent of respondents reported expecting prices to continue to decline, with 30 percent expecting price stability. The largest group, 43 percent, expect prices to rise in the coming 12 months.

“Buyers are looking beyond the pandemic. They’re looking at a strong economic rebound and they’re looking at higher oil prices – especially in the light of the Biden’s fiscal stimulus plans – that can enable more government support for the economy,” explained Payne.

All of these factors support a better market in the coming year and hence could explain the survey results, he said.

However, UAE tenants are less confident that they are likely to win further rent concessions from their landlords when their current lease expires.

While 65 percent of renters expect rents to decline, that’s significantly down from 80 percent in October, the survey said.

In line with the survey results, there has been a pick-up in volume of residential unit transactions since early 2021 but Payne still recommends caution among developers.

“My hunch is that most of the developers, especially the larger ones, will be waiting for more clarity on what lies beyond any post-Pandemic bounce, economy-wise, before launching a new series of projects. Caution will, of course, help support price recovery in the market,” said Payne.

 

Source: https://www.arabianbusiness.com/property/459165-why-more-uae-homeowners-renters-expect-property-price-rises-in-next-12-months

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2405 Marina Plaza, Dubai Marina, UAE PO Box 53461

+971 4 408 7000

+971 56 691 4393

website@phrealestate.ae

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