DUBAI - The residential market in the UAE is expected to remain in favour of tenants next year due to the derailed recovery process due to slowdown in the global economy and travel restrictions imposed by the governments, experts claim.

Industry insiders and senior executives said more downside risks are expected for Dubai real estate sector due to widening gap in demand and supply of residential units, leaving room for price decline and lower rents next year.

“The Dubai real estate market will remain in favour of tenants mainly due to the supply which does not seem to be matching the demand at this point,” said Haleema Humaid Al Owais, Chief Executive Officer of Sultan Bin Ali Al Owais Real Estate.

Sultan Bin Ali Al Owais Real Estate was established in 1972 and has grown to become a prominent real estate company since. The company operates as a holistic conglomerate with all functions of rental real estate like Facilities Management and Security under its own umbrella through its offices in Dubai and Sharjah. 

“We expect more risk for the luxury or premium residential segment where prices and rents will experience a downward trend in the near future,” Ms Haleema stated.

Latest available data indicates that the average apartment rents fell by about 4% quarter-on-quarter basis and over 9% year-on-year basis so far. In the villa segment, rents fell 2.5% quarter-on-quarter basis and around 7% year-on-year basis in 2020 so far.

"Businesses will take time to recover while potential job losses, travel curbs and economic slowdown globally, there is a risk that demand for real estate -- rental and sales -- will take time to recover,”Ms Haleema said.

Apartment to Villa

As the property prices have experienced a decline during the past couple of years, rental too has experienced the snowball effect across the UAE. Residents who survived the Covid-19 shock and have stable finances have been moving from smaller apartments to bigger apartments and villas. 

Hussain Haji of Moderna Consultants, said residents have been moving from high-end apartments to villas, even in places where prices stayed the same.

“Property has become more affordable for buyers and tenants and that is a good omen. As the business activity fully resumes in fourth quarter and growth numbers pick up next year, rental and property prices will stage a rebound by the end of 2021,” he added.

The real estate sector plays a big role in the UAE’s economy, primarily in Dubai. In addition, the other member emirates, notably the capital Abu Dhabi, have shown great strides in developing their local property market in the past few years. 

According to the UAE real estate market first-half review by ValuStrat, the property sector’s contribution stood at 5.4%, or AED 80.2 billion for the UAE economy while in case of Dubai and Abu Dhabi it contributed 7.4%  or AED 15.5 billion, and 3.6% or AED 28.7 billion, to GDP, respectively. 

Ms Haleema said tenants are now looking for better value for their money. 

“We have seen a shift in trend as families prefer villas with large outside areas and spacious apartments with balconies so they have enough space for socially distancing and family activity. This positive trend will help revive real estate and its contribution to the UAE economy,” she added.

About Sultan Bin Ali Al Owais Real Estate:

Established with the vision of creating a lasting legacy in 1972, Sultan Bin Ali Al Owais Real Estate has grown to become a prominent real estate company with offices in Dubai and Sharjah, UAE.

Sultan Bin Ali Al Owais Real Estate is dedicated to operating with professionalism and reliability in all aspects of its business. The Company has an unwavering commitment to delivering on its promises, as well as providing services that exceed expectations. This has helped develop a strong reputation for the Company as a premier provider of quality and innovative solutions for public and private commercial and residential sectors.

A company built around integrity and strong family values of our founder, Sultan Bin Ali Al Owais, growth and success is powered by the dedication of our people, and the dynamic approach of our expert team that enables us to deliver exceptional solutions every time.

About Moderna Consultants LLC:

Established in 2008, Moderna is one of the leading Real Estate Consultants and Construction companies with operations between SHARJAH and DUBAI. The company has delivered a vast number of projects amounting close to 1,000,000 square feet built-up area during the course of its existence.

The company today has expanded through implementing vertical integration through starting its own companies that cater for electromechanical, plumbing and state of the art cutting and fitting aluminum frames, aluminum cladding and glass achieved by installing high quality cutting and production lines imported from Germany.

Our clients recognize our commitment to deliver the highest standard of work on schedule and within budget. By achieving these objectives, we consistently place our emphasis on best practices on efficiency of work, health and safety.

For Media Queries, Contact:
Naveed Ahmed Pirzada
naveed@nfactor.global 

Send us your press releases to pressrelease.zawya@refinitiv.com

© Press Release 2020

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.