Dubai house prices stable for the first time in 5 years

  • Dubai completed house prices have increased modestly for 3 months consecutively in 1Q 2021 for the first time since 2016
  • Drivers: an anti-lockdown oasis, vaccine implementation (40% of population fully vaccinated), visa reform, Israel accord
  • All this before any boost from the global re-opening of Tourism and at a cheap equity market valuation versus history
Dubai house prices stable for the first time in 5 years

At a moment when global fears over Covid disruption are proliferating again, it is worth taking a contrarian look at Dubai: a potential major beneficiary when global tourism resumes but also an economy that may be beginning to reap the rewards of a successful vaccination programme (already 40% fully vaccinated), a more open living environment compared to lockdowns proliferating across Europe and South Asia, structural reform on residency visas, and the UAE-Israel accord. House prices, according to the 21 April update from REIDIN, have registered very slight month-on-month increases for 3 consecutive months.

This is the first time this has happened for about 5 years. Admittedly, prices are still down year-on-year, by about 4%, but the rate of decline is slowing. This is a contrarian observation because Dubai equities, measured by the local DFM General Index, are up merely 7% year-to-date – much worse than the 26% increase in neighbouring Abu Dhabi (ADSMI) and 17% increase for MSCI GCC – and are valued on forward PB of 0.9x, which is a c15% discount the 5-year median.

Dubai house prices stable for 3 months in a row

Related reading

UAE calls citizens of the world, January 2021

Dubai Covid-19 cases surge, again a lesson for all EM tourism, January 2021

UAE doing all it can to reignite expats, Dubai equities still cheap, November 2020

UAE-Israel: Geopolitical and economic aspects of the deal, September 2020

Dubai: The VIP Room, March 2017

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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a res...

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