The UAE’s real estate sector has shown an unexpected level of resilience in the face of serious challenges created by the pandemic, according to the Q4 2020 UAE Real Estate Report published by the Property Management company Asteco.

 

Although not consistently, sales prices and rental rates remained in contraction in 2020, primarily driven by the pre-existing supply-demand imbalance broadly in line with previous years and does not seem to have changed with the manifestation of Covid-19, it stated. 

 

At the end of 2020, an increase in villa sales prices and rental rates for certain developments was witnessed, which was attributed to changing work/place and work-life habits.

 

According to the report, 2020 did not see a discernible change in the average trajectory of sales prices and rental rates. However, the supply-demand imbalance is likely to worsen over the course of 2021, similar to last year, warned Asteco. 

 

The longer-term trend towards remote working will also see a need for larger residential dwellings and short term/serviced Apartments with more flexible Leasing and payment plans, it added.

 

"Covid-19 created an environment of uncertainty, which resulted in the need for pre-existing/emerging market trends to be accelerated, some of which are merely circumstantial while others are here to stay for the long run," stated CEO Aengaar. 

 

"Flexible and home working, use of advanced and smart technologies such as AI, automation, contactless technology, need for larger units with outdoor space and increased storage space and preference for lower density developments are some of the trends that will be taken over in 2021 and beyond," he noted.

 

"There have been a number of positive reports suggesting that the economy is slowly moving into a recovery phase. However, given new lockdown restrictions in many parts of the world, it is widely perceived that the full economic impact and the pace of recovery is still uncertain and will ultimately be influenced by a range of factors, many of which are outside of the UAE’s borders," added Aengaar. 

 

According to him, regulatory measures and decisions taken by the UAE government including a series of stimulus packages coupled with the global availability of the vaccine will significantly fuel the recovery of the market. The upcoming Expo 2020 would also boost market sentiment, he stated.

 

"While the downward trajectory in the real estate market for the short term is unavoidable due to strained economic and market conditions, the medium and long term outlook for the UAE is more encouraging, fuelled by recovering oil prices, forecasted GDP growth, a proactive government response and clear focus on economic progress and sustainability," he added.-TradeArabia News Service