What a year we’ve all just had.
As we turn to face 2021 with measured optimism, what should we expect from a real estate market that has so many of us vested in it both professionally and personally?
Risk sentiment remains in the driving seat as optimism prevails. However, the rapid spread of COVID-19 variants at a time when vaccine supply remains limited, may curtail investor enthusiasm.
Dubai’s economic climate for the year ahead
Dubai’s policy makers are actively managing new home building activity to mitigate oversupply risk. This will give demand and supply the opportunity to converge towards equilibrium. And with the government supporting businesses and growth, Dubai’s economy is poised to make a strong recovery this year.
Predictions for the residential housing market in Dubai 🇦🇪
Indicators are signalling that prices have bottomed.
Rising transaction volumes, upward trending house prices in popular locations, and a tightening of supply are all fuelling confidence in Dubai’s residential real estate sector. The spread between a secondary market property’s price and it’s replacement value is once again realistic, and risk-adjusted yields are where they should be.
Assuming COVID vaccination programmes succeed as intended, there is every reason to be confident and expect continued growth in asset prices during H1|2021
All things being equal, Dubai’s real estate market enters 2021 on the front foot.
Positive sentiment in the wake of the Government’s handling of COVID-19 related challenges, and ahead of this year’s postponed Expo 2020 event, boosted by vaccine hopes and a normalisation to GCC relationships, give ‘bulls’ reason to cheer. Expect good times for H1.
However at the time of writing, European national lockdowns are increasing, with fears over COVID variants possibly dampening global risk-sentiment. How the impact of long-COVID plays out may yet hand market ‘bears’ the reins.
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