Residential demand drives Dubai property prices to rise for first time in six years

Dubai property prices are rising for the first time in six years, Morgan Stanley said in a research note, amid higher demand and a slowdown of project launches since 2017.

Citing research from consulting firm ValuStrat, it said there was a 1.2 percent month on month rise in residential values in April, the index’s highest monthly growth rate in seven years.

“Demand for residential real estate has picked up faster than expected, amidst a wave of government reforms over the past 12 months, attractive mortgage rates, and a shift in demand patterns due to COVID-19,” Morgan Stanley said.

It upgraded Dubai-listed Emaar Development to ‘overweight’ and raised its price target by 37 percent to 3.7 dirhams.

Some developers see recovery taking longer.

“The market is slowly recovering from the effects of the COVID-19 pandemic and its impact on various industries, particularly travel and tourism. I still strongly believe that recovery will take at least 12-24 months,” Dubai’s DAMAC Properties Chairman Hussain Sajwani said in a bourse filing.

DAMAC on Sunday reported a widening first-quarter loss of 189.6 million dirhams, versus a loss of 106.1 million dirhams a year ago.

Meanwhile, Union Properties, another listed Dubai developer, reported profit of 5.6 million dirhams for the quarter ending March 31, versus a loss of 121.9 million dirhams a year ago.

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