Dubai’s real estate sector has been impacted by a slew of unprecedented events, but residential market sales are surviving the current economic crisis relatively well. This is according to a new KPMG report titled Post-pandemic plans for concrete recovery, which analyzes the prospects for Dubai’s real estate and hospitality sectors in the wake of Covid-19.
According to the report, Dubai’s real estate sector is facing significant challenges in the current environment. While demand may be temporarily saturated, government and industry stakeholder incentives are keeping investors engaged and many developers intend to continue projects as originally planned.
Dubai’s residential supply continues to grow, despite softening market conditions. While total residential supply in the emirate was forecast to reach 671,000 units by 2021, the pandemic may affect deliveries.
Prices are expected to remain soft through 2020 due to Covid-19, with Dubai remaining a buyers’ and renters’ market. Despite transactions being disrupted at the end of Q1 2020, attractive prices and terms may prompt residents and stakeholders to explore investment opportunities. Future handovers, however, may be impacted by the duration of the pandemic, buyer sentiment, easing of restrictions and supply chain issues.
Sidharth Mehta, Partner, Head of Building, Construction and Real Estate at KPMG Lower Gulf, commented: “As Dubai’s economy gradually reopens, the emirate’s world class infrastructure and emphasis on innovation is likely to place it in a relatively strong position with investors and consumers, and may strengthen business confidence. We can expect Dubai’s real estate and hospitality sectors to remain resilient and continue to play a critical part in the nation’s economic growth.”
