Deloitte’s seventh annual Middle East Real Estate Predictions report examines the performance of Dubai’s real estate market in 2020 and forecasts the changes in the hospitality, residential, office, retail, industrial and logistics in 2021.
COVID-19 has caused significant disruption across all real estate sectors in 2020 with owners and occupiers having to make necessary adjustments to business operations in response to the statutory restrictions on capacity and mobility. It remains unknown whether the pandemic will result in structural shifts for different use classes. However, with the expected timeline for the COVID-19 vaccine being available in 2021, the planned Expo starting in October and the 50th National Day in December will provide an opportunity to showcase Dubai in a post-COVID-19 world to both visitors and residents.
Dubai real estate market performance
- The Dubai hotel market has experienced a major shock and has had to adapt during a very difficult period. With the vaccine currently being rolled out and Expo rescheduled to start on 1 October 2021, it is hoped that a rebound will occur, and performance matrix return to much healthier levels.
- Tenants remain in the driving seat as residential properties rents declined by 10% as of Q3 2020. Also, demand for secondary market properties has outpaced transaction volumes for off-plan units whilst cash transactions continue to dominate.
- The impact of COVID-19 on business performance is expected to be the primary driver for change in office space requirements.