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Global Market Insight 13 May 2021

Observer UAE Report - Q1 2021

The United Arab Emirates' residential sector enjoyed a robust opening quarter of 2021, with economic improvements, legislative reforms and a successful vaccine roll-out buoying market sentiment and driving transactions.

Villas across Dubai and Abu Dhabi saw increased demand, with average prices rising by 3.9% and 2.2%, respectively, quarter-on-quarter (October-December 2020 vs. January-March 2021). Villa prices across both emirates surpassed their Q1 2020 averages, up by 1.1% in Dubai and 0.5% in Abu Dhabi year-on-year.

Villa rents also fared well over Q1, with continued tenant demand for larger accommodation and outside space supporting uplifts across both emirates.

Apartment values were broadly stable, with prices rising by 0.1% in Dubai and 0.2% in Abu Dhabi quarter-on-quarter. Apartment rents across both emirates recorded modest Q1 declines, with continued unit handovers, along with changing tenant preferences, placing downwards pressure on rates.

While upcoming supply may challenge apartment sector performance, we expect demand for villas to continue over the months ahead.

For a further insight into the residential market in the UAE, please read our full report below.