A recent study by advisory firm ValuStrat suggests that Dubai had the best first quarter for ready home cash sales since 2014 in Q1 2020
The property market report mentioned that on a quarterly basis, Q1 2020 saw cash sales of ready homes up 30.4 percent annually with no change quarterly.
While properties developed by Emaar, Dubai Properties, Dubai Holding and Danube, surpassed the sales charts overall, the top off-plan locations transacted during April 2020 were in Dubai Creek Harbour, Jumeirah Village, Umm Suqeim Third, and Jumeirah Beach Residence, and most transacted ready homes were in Palm Jumeirah, Dubai Marina, Town Square, Arabian Ranches and Downtown Dubai, the report highlighted.
In Abu Dhabi, the average citywide residential asking price per square foot declined 2.2 percent quarterly and fell 7.8 percent when compared to last year.
“The average asking price for ready apartments stood at AED 1,178 per sq ft displaying a decline of 2.5 percent quarterly, and 5.9 percent lower than in the same period last year. For ready villas, the average asking price was AED 876 per sq ft indicating prices declined 1.6 percent quarterly and 12.1 percent annually”
– ValuStrat property market report.
With more than 40 years of experience and a client base of 1,000 corporations in the Middle East and North Africa, ValuStrat understands the region and has predicted the post-COVID-19 scenario for the UAE real estate market.
While tenants in the UAE are expected to renew lease contracts in the medium term, the trend of falling residential rents will come under further pressure from job losses and salary reductions, said the report, adding that the would-be end-users that have been doing due diligence for their first property might finally decide on a property purchase given that buyers may enjoy increased bargaining power during the current climate.
In the post-Covid-19 world, the office market is likely to be impacted negatively due to a rise in remote work phenomenon. “The Dubai Future Foundation predicted remote work could be the new norm after the pandemic. Currently, though, the UAE has the lowest remote workforce percentage of 10 percent when compared to the global average of 62 percent as per the International Workplace Group. This statistic might see growth as companies in the UAE would reconsider implementing work from home policies and change their perspective and attitude towards remote work, it said.
The report notes the challenges of the retail and hospitality sectors in the post-pandemic market. Though brick and mortar retail were on the decline in 2019, innovative marketing techniques by malls and retailers are anticipated to bring the retail market on track, at least earlier than the hospitality sector.