Recent findings released by investment and research company Peninsula Real Estate revealed that the housing market sentiment remains subdued in the UAE, where property prices and rents have been on a decline due to the economic fallout of the coronavirus pandemic.
Nearly eight in ten (74 percent) of UAE residents polled by the investment firm in its second home sentiment survey said they anticipate apartment and villa prices to decrease in the second half of 2020, while an almost equal number of tenants have secured lower rents.
“[The research] has demonstrated poor sentiment towards real estate in the Gulf,” said Christopher Payne chief economist at the firm.
While, Chris Roberts, CEO of Eltizam Asset Management Group acknowledged that “The survey results reflect the negative sentiment brought on by the COVID-19 pandemic, and its significant impact on the global economy during (the first and second quarter).”
Downward slide continues
UAE’s property sales prices and rents have been decreasing in recent years, primarily due to a huge oversupply. The decline has been recently been worsened as the coronavirus pandemic as investors turned cautious and many tenants have been unable to upgrade their accommodation or continue renting amid job losses and salary cuts.
In its latest analysis, real estate consultancy firm Asteco noted that residential and commercial rent drops in Dubai could “increase” while market conditions in Abu Dhabi could “worsen” with failing demand.
Dubai witnessed Rental values for apartments, villas and offices drop by 13 percent, 10 percent and 13 percent, respectively, in June compared to a year earlier.
75 percent of the UAE tenants have renegotiated their lease in the last six months and that their rent had been reduced as a result. A third of the respondents have had their rent dropped by 10 percent or more.
About 59 percent of the respondents also assumed the value of their home to fall in the second half of the year. Overall, residents in the UAE expected rents and prices to fall by 8 percent in the remainder of 2020.
In Saudi Arabia, 40 percent said they expect rents and prices to fall in the second half of the year.
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
