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Is the UAE’s real estate sector resilient despite the pandemic?

Article-Is the UAE’s real estate sector resilient despite the pandemic?

AbuDhabiSkyscrapers
Despite challenges over the last few months, the UAE’s real estate sector has shown an unexpected level of resilience, according to the Q4 2020 UAE Real Estate Report published by Asteco.

Cityscape Intelligence looks at the key highlights from the report:

  • During 2020, the leasing sector benefited from the implementation of direct debit and credit checks, while the Sales market profited from reduced LTV (loan-to-value) ratios and lower interest rates for expatriates and Emiratis alike.
  • The Government of Dubai has earmarked a total budget of AED 57.1 billion for 2021 and although reduced from 2020 (AED 66.4 billion), it takes into account the unprecedented economic circumstances and consequences of the pandemic.
  • In Abu Dhabi, approximately 15,000 residential units are anticipated for completion in 2021. The majority of the upcoming supply is located within the following investment zones: Reem Island comprising approximately 1,850 units, Al Raha Beach with 4,000 units, Yas Island with 2,400 units, and Saadiyat Island with 800 units.
  • Similar to 2020, Al Ain will see a limited amount of new supply in 2021.
  • In Dubai, 41,500 new residential units and 1.5 million sq. ft. of office space are expected for handover in 2021, a figure that could possibly increase if currently stalled/on-hold projects resume activity.
  • With more supply expected for handover in 2021, tenant retention will become increasingly important and can be achieved through competitive rates/incentives and proactive/professional property management.
  • In light of the pandemic, the Emirate of Sharjah rolled out a number of stimulus measures to support the economy, most notably a reduction in property sales fees from 4% to 2%, for non-GCC nationals until the end of March 2021.

 


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