Strategy Note / United Arab Emirates

Dubai real estate prices falling fifth year in a row and still not bottomed

  • Completed house prices are 33% below the 2014 peak, but if they hit the 2010 trough there is 20% further downside
  • Are reforms (eg citizenship) enough to absorb excess capacity, and that too, before another 5-35% of planned addition...
  • ... and with with corporate closure and consolidation locally, low oil prices regionally, remote working shift globally?
Dubai real estate prices falling fifth year in a row and still not bottomed

The price of completed real estate in Dubai is in its fifth consecutive year of decline. Prices in the residential segment, for example, are over 30% below their 2014 peak.

Reforms are underway to expand the international population that might consider relocating to Dubai on a more permanent basis and Dubai has a deserved reputation for doing what it takes to attract expatriates, tourists and multinationals.

But the disruption wrought by Covid-19, locally, to businesses (and the white collar workers they employ) and the catalyst sparked by Covid-19, globally, for the adoption of remote working may have shifted the goalposts.

Prices in the residential segment have c20% further downside should they revisit the trough of 2010.

Related reading

Dubai: The VIP Room (Mar 2017)

Dubai dichotomy: completed real estate vs Emaar off-plan (Jan 2020)

UAE: Oil price more than new visas should lift torpor (May 2018)

Dubai: Price cuts in the absence of a flexible FX rate (Oct 2017)

Dubai: Cheap stocks but expulsions cast a shadow (Jun 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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