Dubai: Regulatory changes at both the federal and local levels strengthen UAE’s house markets in 2020, provided by Knight Frank in a report on Sunday.
“Despite being presented with an unprecedented set of challenges in 2020, real estate markets across the UAE have proved to be remarkably resilient,” said Taimur Khan, Associate Partner at Knight Frank Middle East
“The easing of a number of geopolitical issues over the course of 2020 will also further strengthen market fundamentals,” said Khan.
Apartment prices are lower
Residential sales costs in Abu Dhabi lowered on average by 2 percent in 2020, lower from 7.5 percent a year before. While average apartment costs are down by 3 percent, average costs for villas have risen by 2 percent, the first annual rise in costs since 2014.
Residential rents in Abu Dhabi persuaded to soften in 2020, with average rents falling down by 4.3 percent. Over this time, average apartment and villa rents lose down by 4.6 percent and 2.6 percent respectively.
“Despite Dubai seeing some of the most stringent lockdown measures in the UAE throughout the early stages of the pandemic, residential demand was relatively resilient in 2020,” said the report.
Beginning data provides that about 33,000 residential units dealt in 2020, lower to 16.4 percent in comparison to 2019. This softer level of demand was largely supported by a significant fall in off-plan sales, which lowered by 32.1 percent in 2020.
Average mainstream costs in Dubai lowered by 7.1 percent in the 12 months to December 2020.
Supply will ease
The consultancy provides new supply levels to start to ease from 2022 in Abu Dhabi and from later in 2023 in Dubai.
In 2020, new launches in both emirates were at the smaller levels since 2004 and 2012 respectively.
“Assuming these trends remain constant, mortgage rates remain at or around historic lows and loan-to-value ratios are kept at current levels, we are likely to see prices begin to bottom out during 2022,” said Knight Frank.