Dubai’s property market could see prices rising again in all residential segments by the end of 2021, according to new analysis from consultants ValuStrat.
Its 2021 forecast also said office capital values in the emirate are expected to bottom out this year after reaching 10-year lows while rentals in shopping malls could continue to face downward pressure as retailers re-focus on digital trading after an industry-wide shift driven by the coronavirus pandemic last year.
ValuStrat said that subject to the health crisis being resolved, the economy is expected to improve this year and with Dubai Expo and the 50-year anniversary of the UAE, sentiment in the residential real estate market is expected to pick up and could head towards bottoming out during 2021.
“As developers put new projects on hold, rents and capital values in established villa locations could stablise and perhaps witness gradual appreciation, apartments could follow suite towards the end of 2021,” the research noted.
On the office market, it said that approximately 1.3 million sq ft of workspace is up for delivery in 2021, adding that new government initiatives including visas for expatriate retirees and the expansion of the 10-year golden visa scheme is likely to attract more foreign professionals to settle in the UAE.
“The UAE also reformed its commercial companies’ law and annulled the requirement for some onshore companies to have an Emirati shareholder, which is expected to boost foreign direct investment in the country,” ValuStrat added.
Its 2021 forecast report also estimated that shopping mall supply in Dubai for 2021 will increase to 2.2 million sq ft with upcoming shopping centres including Deira Mall, Dubai Hills Mall, Avenues Mall (Silicon Central) and The Yard by Meraas.
“Establishing a strong e-commerce presence will remain as one of primary strategic move for major retailers including F&B consortiums,” ValuStrat noted.
On tourism, ValuStrat said Dubai is expected to receive 13,063new hotel keys in 2021 as the emirate sees a gradual improvement for key performance indicators including occupancy and RevPAR as global travel sentiment improves after coronavirus.
“Hotels could re-direct marketing strategies to attract more local vacationers in the short to medium term,” the report said as domestic tourism took on a new importance to the industry amid restrictions on international travel throughout last year.
It added that upcoming attractions will include Ain Dubai, the Museum of the Future and Zombie Apocalypse Park.
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