Survey finds “poor sentiment” towards MENA real estate
UAE and MENA Home Sentiment Survey – Q2 2020’ sheds light on region’s real estate sentiment post COVID-19
Potential investors across the MENA region have voiced their views on the real estate sector’s outlook for the remainder of 2020, with respondents hopeful that residential prices will begin to fall in H2 2020.
Respondents, including home owners, renters and investors, took part in Peninsula Real Estate’s second UAE and MENA Home Sentiment Survey – Q2 2020, which was conducted in partnership with Eltizam Asset Management group, CBRE, Cityscape and Berkshire Hathaway Home Services.
Conducted during the first two weeks of July, the findings from the survey found that in the UAE, 59% of respondents expect the value of their home to fall in the second half of 2020; 84% of respondents who are renters expect to see their rent decline.
On average, respondents in the UAE expect rents and prices to fall by 8% in the remainder of 2020, while 75% of respondents who are renters in the UAE and had renegotiated their lease in the last 6 months say their rent fell. A third of these respondents reported that their rent had fallen by 10% or more.
Elsewhere in the GCC, 40% of respondents from Saudi Arabia expect rents and prices to fall in the second half of 2020. Only 8% of respondents expect the same outcome in Egypt.
Commenting on the findings from the survey, Peninsula Real Estate chief economist, Dr. Christopher Payne, admitted that unsurprisingly, its second home sentiment survey demonstrated “poor sentiment” towards real estate in the Gulf.
“Rental negotiations incorporate market movements over the previous 12 months, which may be why owners’ expectations for the UAE are more positive than renters for the remainder of 2020,” said Payne.
“Owners’ perceptions are both more positive for the second half of 2020 than renters and reflect improved sentiment when compared to their views on the past six months.”
Chris Roberts, CEO, Eltizam Asset Management Group, commented: “The survey results reflect the negative sentiment brought on by the COVID 19 pandemic, and its significant impact on the global economy during Q1 and Q2.
He added: “We believe that the UAE government’s recently announced economic stimulus programs, in tandem with the gradual re-opening of various economic sectors hard hit by the shut-down, will see the sentiment shift higher during H2.”