Dubai is set to see citywide price and rent increases in 2022 but at slower, more sustainable rates, according to new research.
Consultants ValuStrat said the continued recovery in the market will be supported by economic reforms and an accelerated vaccination programme.
ValuStrat said 2021 performed better than forecasts, sales transactions broke previous records and capital values mostly reached pre-pandemic levels.
“As the economy improves, with the successful vaccination program and a gradual opening of international borders, market sentiment is expected to pick up further,” it said.
It added that capital values and rents of villas in highly desired prime locations are expected to reach and perhaps surpass 2014 peak levels.
ValuStrat noted that downside risks involve the government reintroducing movement restrictions due to the spread of the Omicron variant of the Covid-19 virus.
It also warned that with an over-supply of apartment units expected in the coming couple of years, particularly within the E311 and E611 highway corridors, prices and rents of apartments are expected to stabilise by the second half of 2022.
“While increases in loan to value ratios aid property investment, the impact of likely rising interest rates will remain to be seen in the short and medium term,” ValuStrat’s outlook for 2022 added.
It said further demand from international investors is expected as travel restrictions are eased, in addition to domestic investors currently residing within the northern emirates.
