Dubai's housing prices are expected to fall at a slower pace

According to the property market analysts, the risk is low that a resurgence in COVID-19 will derail the housing market.

Dubai's house prices are expected to fall at a slower pace this year and next than previously thought as hopes for a successful vaccine rollout and an economic recovery boost confidence in the sector, a Reuters poll showed.

After declining 3.5 percent in Q1 2020, Dubai property prices have shown signs of stabilizing. They fell by a much slower 0.9 per cent year-on-year in Q3 after barely changing in Q2, United Arab Emirates Central Bank data found.

The January 13-28 poll of 11 property market analysts predicted Dubai house prices would decline 2 percent this year, a significant improvement from a September survey that forecast a decline of 5.1 percent in 2021 as well in 2022.

After a projected 6.2% contraction last year, Dubai's economy, the Middle East trade and tourism hub, was expected to grow 4.0 per cent in 2021, the government has said, largely driven by measures to help reduce the impact of the pandemic.

When asked what would be the primary driver of housing market activity this year, nine property analysts said a successful vaccine rollout and an economic recovery. One said fiscal stimulus and another said monetary policy.

Experst believe, as the vaccine is coming in across most countries, the significant negative impact of COVID-19 will gradually fade away. Various government initiatives taken over the last year to spur growth will eventually bear fruit in 2021.

On an affordability scale of 1 to 10, where 1 is extremely cheap and 10 is extremely expensive, Dubai house prices were rated 4 - the lowest since polling began in August 2019.

Most analysts who responded to another additional question, said the risk was low that a resurgence in COVID-19 would derail the housing market.