Dubai: There is still an ideal opportunity for likely landowners to make up their minds – costs in 80% of the UAE freehold residential market will probably stay at 2020 levels. What’s more, it very well may be one year from now before property estimations begin to gain some ground, as indicated by the consultancy Knight Frank.
Without a doubt, there are certain regions in Dubai that are now giving indications of price recovery, particularly top-end destinations like the Palm fronds and Dubai Hills. In any case, for the more extensive market, homes there are still coping with the double-digit price dip of the last two years.
In its recent update, Knight Frank informed that population growth requires to look like a spike for property values to make gains again. “With population levels in Abu Dhabi and Dubai estimated to have declined by roughly 5 percent in 2020, growing levels of supply and existing vacancy levels, residential property values in both fell in 2020,” the report says. “Whilst population growth is expected to return in 2021, it will likely not be at least until late 2022 before we see population levels return to their pre-pandemic levels.”
“In Dubai, this lower level of demand will be further compounded by a continuing influx of supply, which in turn is likely to continue to put pressure on property values.”
Office demand
In Abu Dhabi, the moderately low degrees of new supply have guaranteed security on rentals. But in Dubai, with rents “continuing to fall and a surge in vacancy, office property values have declined materially on average,” the report states.
Retail reality
After a year of unprecedented declines in visitors and sales, “it is not surprising that we have seen retail property values decline in both Abu Dhabi and Dubai in 2020,” the report adds. “In Abu Dhabi, given its relatively low levels of upcoming supply, we expect values to remain stable. Whereas in Dubai, given significant levels of upcoming supply and hybrid – or turnover-only rental models – going forward, we expect values to continue to decline in 2021.”