Home sentiment in the UAE continues to improve.

Of our respondents, both UAE renters and homeowners, only 34% expect prices and rents to decrease in the coming 12 months. This compares to 47% of respondents six months ago, and 74% one year ago. While price increases have occurred, they have been concentrated at the high end of the residential market, which perhaps explains why the most common answer when asked about the residential market, accounting for 38% of responses, was ‘remain the same’.

Since 2015, residential real estate in the UAE has been in a bear market; some estimates suggest that, on average, prices have declined by over 40% since the peak. Not surprisingly, Covid-19 exacerbated the trends of the previous years; especially given the likely population declines experienced in the country in 2020.

With the economy recovering, the UAE seems to be benefiting from a global rally in real estate. That said, so far, the recovery has been limited to the residential market and more specifically town houses and villas. So, while the Dubai Land Department, reported a 4.9% quarter-on-quarter price increase for single family homes at the end of March 2021, prices overall were 3.6% lower. This reflects continued weakness in the apartment market.

Time will tell whether or not the rally broadens to cover all residential real estate. While sentiment is improving, economic fundamentals remain challenging and may not support a protracted boom.

For the first time since we began conducting our survey, there is a 50/50 split between those reporting an expectation for rents to decline in the coming 12 months, and those expecting stability or an increase in rent. That said, very few respondents (2%) expect to see their rent increase.

We have also seen a rise in the number of renters contemplating buying a home. Of our respondents, 55% reported that they were equally, or more, likely to buy a home in the next 12 months. This compares to 39% six months ago and 37% one year ago.

A Home Sentiment Survey measures consumer sentiment towards the residential property market. It allows for the creation of an index, which is derived from regular surveys of a representative sample of homeowners and renters. The survey can determine sentiment regarding buying, selling, investing in, renting of and renovating property, as well as property market conditions in general.

Why do a Home Sentiment Survey?

Survey findings are useful in informing a variety of decisions made by stakeholders: from developers, government authorities, individual buyers, renters and investors.

Where did we collect data from?

• • Received responses from residents and investors in 22 countries, including 9 in the Middle East North
  Africa region
• • In 2021, our survey will be conducted twice a year.
• • Data only presented on countries where we received a sufficient number of responses.

This report has been issued by Peninsula Real Estate Management Limited (“Peninsula”) for informational purposes only. It does not purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on information collected from raw data sources, which Peninsula believes to be reliable. Peninsula has not independently verified those sources and makes no guarantee, representation or warranty as to its accuracy or completeness. The data published in this report is based on responses that we received to a questionnaire sent out by Peninsula during March 2020 and more widely distributed through our partners Eltizam, CBRE, Cityscape and Berkshire Hathaway Home Services. The raw data has not been amended, weighted or seasonally adjusted; we do not, therefore, claim the findings to be statistically significant; nor, as a result, can we guarantee that they accurately reflect real estate sentiment in the MENA region. The sentiment measures published in this report should not be assumed to be accurate predictions of future property market performance. Peninsula accepts no responsibility or liability in respect thereof or for any reliance placed by any person on such information. All opinions and views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. No investment or other business decisions should be made based on the views expressed in this report. This document may not be reproduced or circulated without the prior written consent of Peninsula.