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Last modified on 1st November 2021. Dubai Real Estate Blog
The market has entered into a new dynamic, where supply is now met by strong demand. Unlike all our expectations, price/equilibrium discovery is nearing an end and we are likely to see recovery in prices very soon. We also expected transactions volumes to slow, and that again has surprised us, where June/July are set to be very busy months. This could be attributed to a number of factors:
All the above are reasons to remain positive about the market. The trend that you will likely see in the coming months is a big shift for hard assets (I.e. Real Estate). Stock markets are arguably inflated everywhere, with P/E multiples crossing the 20 level on average across the Globe. Commodities are very difficult to value, especially with the currency war going on at the moment as well as inflationary pressure from Global Central Banks. Bonds will also face significant pressure as most central banks, will start raising interest rates, and that will be detrimental for Bonds, especially those with higher tenure.
The shift into hard assets is something that will be witnessed in the coming months. We have already seen an increase in transaction activity as well as inquiries. This is because Real Estate as an asset class is much less volatile than stocks, which investors are wary can be very volatile in the coming months because of all the uncertainty. When investors cash out of stocks, bonds, or commodities, the safer haven they look for is property and Real Estate.
The trend towards funds will be witnessed in the Property market here, where yields are very attractive compared to global markets. Commercial property (Warehouses and labour camps) will take the bigger slice of the cake. Watch this space
Food for thought!
Abdullah Alajaji Managing Director Driven Properties L.L.C
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