A new study by Peninsula Research reveals that sentiment in the UAE has for the first time in a year has turned optimistic, with respondents expecting prices and rents to be stable or go up in the next year.
“The residential real estate market in both Abu Dhabi and Dubai was very weak in 2020, with apartment rents in Dubai declining by over 15%, and sales prices falling by as much as 10%. 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,” reveals the report.
The survey found that 27% of respondents reported that prices were expected to decline, while 30% expected price stability and 43% expected prices to rise over the next year.
“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 2020,” reads the report.
Peninsula Research found that while UAE renters are less confident that they will win further rent concessions from their landlords when their current lease expires, 65% of renters sill expect rents to decline, however the research says that is down from 80% at the end of Q3 2020.
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