Home Sentiment Survey – Quarter 2 – 2020

July 27, 2020


Key Findings:


  • • In the UAE, 59% of respondents expect the value of their home to fall in the second half of 2020; 84% of respondents who are renters expect to see their rent decline.
  • • On average, respondents in the UAE expect rents and prices to fall by 8% in the remainder of 2020.
  • • 75% of respondents who are renters in the UAE and had renegotiated their lease in the last 6 months say their rent fell. A third of these respondents reported that their rent had fallen by 10% or more.
  • • In Saudi Arabia, 40% of respondents expect rents and prices to fall in the second half of 2020. Only 8% of respondents expect the same outcome in Egypt.
  • • 70% of respondents in the UAE who were renters think the rent they pay is fair or good value for the property they lease.

74% of survey respondents in the UAE thought prices and rents would fall in the second half of 2020; in Saudi Arabia, only 40% expect price and rent declines.


Not surprisingly, our second home sentiment survey has demonstrated poor sentiment towards real estate in the Gulf. The survey was conducted in the first two weeks of July and represents our first opportunity to gauge the impact of Covid-19 on homeowner and renter attitudes. The survey asked renters and homeowners in the region to give us their view on the coming six months, as well as the past few months.In the UAE, renters gave us a clear indication of market weakness. Overall, 75% of renters reported that they were able to negotiate lower rent in Q2. None of this should come as a surprise, given what we know about the market over the past 12 months, even before factoring in the impact of Covid-19. However, within this cohort, there was a clear skew towards larger declines in rent: of the 75% reporting a fall in rent, 37% (29% of total responses) negotiated a drop of 10% or more, 31% (23% of the total) a drop of 5 to 10%, and the remainder a drop of 0 to 5%.

Renters expectations suggest more of the same to come in the UAE. In the second half of 2020, 84% of renters expect their rent to decline, 14% expect it to remain the same, and only 3% expect to pay more. Of the 84%, 38% (32% of total respondents) expect a 10% or more drop in rent, 43% (36% of the total) expect rents to decline 5 to 10%, and 18% (15 of the total), think their rent will drop somewhere between 0 and 5%.

Rental negotiations incorporate market movements over the previous 12 months; which may be why owners’ expectations for the UAE are more positive than renters for the remainder of 2020. Specifically, 59% of owners (compared to 84% of renters) expect prices to fall. Of these, 39% (23% of the total), expect 10%+ declines, 34% (20% of the total), see 5 to 10% declines, and 27% (16%) of the total think prices will decline by 0 to 5%. While only 9% of respondents thought that prices would increase, a large proportion (30%) thought that prices would be stable throughout the rest of the year.

Owners’ perceptions are both more positive for the second half of 2020 than renters and reflect improved sentiment when compared to their views on the past 6 months. No doubt reflecting Covid-19’s impact on an already weak market, 50% of respondents thought the price of their home had fallen by at least 10% year-to-date.

Overall, 83% of respondents said that prices had fallen; while 14% thought prices had remained the same, and only 2% thought prices had risen.

Homeowners in the UAE may be signalling with this finding that the worst has passed. Even so, it’s clear that the residential market will continue to be weak for some months to come. Indeed, this is apparent given how sentiment in Saudi Arabia, while still poor, is noticeably better than in the UAE. In Saudi, for instance, only 40% of respondents (both renters and homeowners) expect price and rent declines in the second half of the year (32% expect price stability, and 28% expect prices to increase). This compares favourably to the UAE where 74% of all respondents (renters and homeowners) expect prices and rents to fall in the rest of 2020 (20% expect price stability, and 6% expect price rises).

The difference in sentiment between the UAE and Saudi Arabia can be explained by a number of factors, not least of which being that Saudi’s residential market, particularly in Riyadh, had already exhibited a turnaround prior to Covid-19. An additional important factor is the high proportion of expats in the UAE (c. 85% of the population) relative to Saudi Arabia (roughly 30% of the population). A recession caused by Covid-19 is far more likely to cause the population to shrink in the UAE than in the Saudi, thereby lowering demand for residential real estate. Indeed, with very few expats, relatively speaking, sentiment in Egypt remains bullish, as real estate continues to be viewed as a safe and attractive inflation-hedge.

There were noticeable differences in the responses from the UAE, Saudi Arabia and Egypt, with sentiment noticeably weaker in the Gulf than in Egypt. In the UAE, 74% of respondents expect rents and prices to decline in the coming 6 months, with only 6% of respondents expecting prices to increase. In Saudi Arabia, 40% of respondents expect rents and prices to decline, 28% expect increases. Conversely, in Egypt, 44% of respondents are expecting rents and prices to increase, with only 9% forecasting declines.

Compared to early April, there is little change in Egypt; prices are still expected to continue their upward momentum, largely unaected by Covid-19. While data from Saudi Arabia still points to price declines, it is noticeable that a lower proportion of respondents expect price declines in the next 6 months than were expected for Q2. This might suggest that the worst impacts of Covid-19 on sentiment occurred in Q2.

Sentiment appears to have deteriorated in the UAE, however, as more people now expect prices to decline in the coming months than was expected at the end of Q1. This could be explained by the perception that job losses, resulting from Covid-19, will have a larger effect on real estate in the UAE because a far higher proportion of the population are expats whose residency is dependent on

Focus on UAE

The Peninsula Home Sentiment Index fell to 42 from 47; having previously risen from 44 in Q4 2019. This reversal in sentiment was, no doubt, a reflection of the impact of Covid-19.

A score of under 50 represents, on balance, more negative than positive sentiment. With a score of 42, the survey respondents were signalling their expectation for the real estate market (prices and rents) to fall between 5 and 10% in the coming months.

The shift in sentiment is roughly equal for both renters and owners. In our prior survey, owners were expecting the value of their homes to fall only marginally throughout 2020. Now the owners index stands at 45, signalling an expectation for 5% price declines. Renters, having previously expected their rents to fall 5% this year are anticipating negotiating 10% declines with their landlords.

Findings from both UAE Owners and Renters

Findings from UAE Owners

Findings from UAE Renters

What is a Home Sentiment Survey?

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 of 7 MENA countries.
  • • Majority of responses for the first survey were for the UAE market.
  • • We will run the survey every quarter, and as the number of responses increases in other countries, we will be able to provide a more detailed overview of other markets.





PENINSULA is an investment and research company that is identifying trends, opportunities and challenges in the MENA real estate market.

ELTIZAM ASSET MANAGEMENT GROUP (Eltizam)is a leading physical asset management company based in the UAE, with an expanding presence across the GCC and MENA regions. Through its group companies, Eltizam provides best-in-class services for the built environment (residential, commercial, retail, industrial and infrastructure asset classes) supporting asset owners to maximize long term returns on assets.

CBRE GROUP, INC. is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). CBRE oers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.

CITYSCAPE INTELLIGENCE, part of Cityscape the world leading global real estate event series, is a brand new content hub that connects the industry to global real estate news and market intelligence.

BERKSHIRE HATHAWAY HOMESERVICES GULF PROPERTIES is the regions premier real estate agency providing expert advice and support to our clients, across many key real estate markets across the world.


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.

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