UAE residents turn bullish on property price, rent prospects. New survey reveals 53 percent of respondents expect prices to rise or remain stable compared to 31 percent in October

Residential real estate market in both Abu Dhabi and Dubai weakened in 2020, with apartment rents in Dubai declining by over 15 percent, and sales prices falling by as much as 10 percent, according to Peninsula.

Sentiment in the UAE real estate market has turned positive for the first time in a year with many more residents expecting prices to rise in the next 12 months, according to a new survey.

Fifty-three 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.

In conjunction with partners CBRE, Cityscape, Eltizam and Berkshire Hathaway Home Services, Peninsula’s fourth Home Sentiment Survey also showed that UAE homeowners are more confident about their prospects.

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.

“This marks a hugely significant improvement in sentiment. In Q1 and Q2 2020, the majority of homeowners expected price declines over the following 12 months. At the end of Q3 2020, responses were split 50/50. The large positive skew is also clearly demonstrated in the contrast between Q4 and Q3,” said Peninsula.

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.

According to Peninsula, the residential real estate market in both Abu Dhabi and Dubai weakened in 2020, with apartment rents in Dubai declining by over 15 percent, and sales prices falling by as much as 10 percent.

Since the peak of the cycle, both rents and sales prices have roughly halved.

“With sentiment now turning, 2021 may be the first year since 2014 during which the market strengthens. For the first time since Q1 2020, when we began conducting our sentiment survey, the majority of respondents do not now expect prices and rents to fall in the coming 12 months,” the company said in a statement.

Comparing Q4 with Q3 2020, the percentage of respondents expecting prices and rents to go down by 10 percent or more fell by 13 percent to 15 percent. Counterbalancing that, the percentage of respondents that now believe prices and rents will remain the same in the next 12 months increased by 14 points.

“Remain the same” was, by some margin, the most common response, making up 31 percent of total responses.

Peninsula said throughout the last 12 months, a majority of renters have considered the rent they pay to be fair or good value. With further rent declines during 2020, this proportion has now risen to 81 percent of respondents.

The Home Sentiment Survey measures consumer sentiment towards the residential property market and responses from residents and investors were received from 22 countries, including nine in the Middle East and North Africa region.

Article link: https://www.arabianbusiness.com/property/459039-uae-residents-turn-bullish-on-property-price-rent-prospects

See Q4 2020 report: https://www.peninsula-reh.com/research-paper/home-sentiment-survey-quarter-4-2020/