Among all the major cities in the world, Dubai was the only undervalued market, and the only one to be classified in a lower category than it was last year, according to a report by UBS.
According to a report published by the Global Real Estate Bubble Index 2021, the reason for an economic rebound in the region is primarily because of better affordability, easier mortgage regulations, and higher oil prices.
Even before the Covid-19 pandemic, a glut was noticed in housing supply, along with lower oil prices contributed to further dampening of the Dubai market. During the lockdown last year, a large number of people lost their jobs, which led them to move out of the Emirate. But lately, sales transaction has been picking up as property buyers take the recovery in business activities and prices that are still attractive.
Going by a report published by S&P, the rebound in the property market is also supported by high Covid-19 vaccination rates. It said, “Dubai’s real estate sector will likely benefit from the World Expo 2020 which started a year late this October due to the pandemic. But structural oversupply of residential properties will challenge price increases over the long term, making the recovery fragile.”
USB also warned that even though construction in Dubai has slowed down, the limitless supply in the region poses an imminent threat presented by long-term appreciation prospects.