From “ The Gulf ” 8 – Mar – 2021
The real estate sector in the United Arab Emirates has shown unexpected resilience in light of the severe challenges imposed by the “Covid-19” pandemic, according to the results of the fourth quarter of 2020 from the “UAE real estate sector report” issued by Asteco.
Selling and renting prices witnessed an unsteady state of contraction during the year 2020, mainly due to the pre-existing disparity between the rates of supply and demand, and it came in line with previous years, and it seems that it has not changed as a result of the spread of the “Covid-19” pandemic. In late 2020, villa prices and rental rates recorded an increase in some areas and complexes, due to changes in workplaces, housing, and professional life habits.
Villas and rental rates have increased in some areas, the report indicated that the changes in average selling and rental prices in 2020 were slight, but the gap between supply and demand is likely to widen during 2021, similar to last year. The report indicated that the long-term approach to working remotely will contribute to enhancing the need for wider housing units and serviced apartments, with short-term rental contracts, in accordance with more flexible rental and payment plans.
The Most Prominent Results
During 2020, the real estate rental market benefited from the application of direct deduction benefits and measures to verify the extent of customer commitment to rental payments, while the sales market benefited from lower loan-to-value ratios and lower interest rates for residents and citizens alike.
The Dubai government has allocated a total budget of 57.1 billion dirhams for the year 2021, and despite its decrease compared to the 2020 budget of 66.4 billion dirhams, it takes into account the unprecedented economic conditions and the repercussions of the pandemic. The prevailing market conditions are likely to continue due to long-term economic uncertainty.
In Abu Dhabi, about 15,000 housing units are expected to be delivered in 2021, most of them on Reem Island (about 1,850 units), Al Raha Beach (4,000 units), Yas Island (2,400 units), and Saadiyat Island (800 units). Similar to 2020, al ain will witness the launch of a limited number of new housing units in 2021. In Dubai, 41,500 new housing units and 1.5 million square feet of office space are expected to be delivered in 2021, a figure that is expected to increase in the event of resumption of postponed or suspended projects.
With more units expected to be delivered in 2021, the importance of retaining existing tenants will increase, and this can be achieved by providing competitive prices and incentives, and professional and proactive real estate management. In order to respond to the repercussions of the pandemic, The Emirate of Sharjah has launched a number of incentive measures to support the economy, most notably the reduction of real estate sales fees from 4% to 2% for non-citizens of the gulf cooperation council countries un.