The average residential property prices in Dubai registered a 4.4 per cent decline over the 12-month period from Q4 2019 to Q4 2020 but grew 1.2 per cent on a quarterly basis, according to Cavendish Maxwell, a leading property consultancy and chartered surveying firm providing services in the Middle East and Africa.
Average apartment rents declined 16% over the 12-month period from Q4 2019 to Q4 2020 and 4% on a quarterly basis while villa/townhouse rents were lower by 1.7% on a yearly basis but higher by 3.4% from the previous quarter, stated Cavendish Maxwell in its Q4 2020 UAE Property Market Report, containing key data and trends for Dubai, Abu Dhabi and the northern emirates.
The report was compiled by the firm’s in-house strategy and consulting team in collaboration with its extensive client and partner portfolio, drawing on proprietary data from real estate intelligence platform, Property Monitor.
It provides comprehensive insights on the health of the UAE’s property market, covering the residential, commercial, retail, hospitality and industrial sectors.
Locations such as Business Bay, Al Furjan and Palm Jumeirah have displayed greater resilience over the quarters and the traditionally sought-after villa and townhouse communities have showcased strong performance since the onset of the pandemic, it added.
Cavendish Maxwell pointed out that a total of 28,255 units are expected to hit the Dubai market in the first quarter of 2021.
Average sales prices in Abu Dhabi’s major residential zones declined by 8% for apartments on a yearly basis and increased by 1% on a quarterly basis. Villa/townhouse prices registered a yearly decline of 6% and a quarterly increase of 2%.
The average rental decline for apartments was 6% on a quarterly basis and 15% yearly. While villas/townhouses saw a 3% yearly decline, rents rose 2% on a quarterly basis. In Q1 2021, 6,193 units are expected to hit the Abu Dhabi market, it added.
On a quarterly basis, rent declines were more pronounced in some of the northern emirates than others. For instance, rents in Sharjah declined over the previous quarter but rents in Ras Al Khaimah were largely unchanged during the same period.
Commenting on the report, Aditi Gouri, head of strategy and consulting at Cavendish Maxwell, said: “The last quarter of 2020 was an extension of changes that were witnessed during the year, may it be upgrading living spaces or adopting flexible working from homes and offices.”
“We saw the prices and rents of more residential communities with superior offerings stabilise and even appreciate, while others continued to soften. Upcoming supply continues to be a nagging worry in the new year but decisions by developers to hold off on new launches and efforts by the Higher Committee of Real Estate will likely help restore balance between demand and supply, cushioning prices,” he noted.
In 2021, we expect more communities to display stabilisation in capital values with the successful vaccine rollout further establishing confidence in the real estate sector and the broader economy.”
According to chief economist Julian Roche, investors in real estate markets throughout the UAE have three good reasons to feel more optimistic about the year ahead.
First, Property Monitor data from Q4 2020 has been encouraging throughout the emirates and across virtually all sectors. Second, cautious consensus optimism over a rise in oil prices is reinforced by the widespread conviction that the global economy will begin to recover, as structural economic adaption mechanisms finally start to work.