(Bloomberg) -- The rally in Dubai’s residential property prices isn’t stopping anytime soon, according to Morgan Stanley.
“Robust demand, peaking supply growth and long lead times for new projects could lead to a tighter-than-expected market over the next several years,” analysts Katherine Carpenter and Nida Iqbal wrote in a report.
Business activity in Dubai, the Middle East’s main financial hub, has risen to the highest level since late 2019 because of a rebound in tourism and a fast distribution of coronavirus vaccines. The United Arab Emirates, a federation of seven sheikdoms including Dubai, has one of the highest inoculation rates globally.
For properties worth at least 10 million dirhams ($2.7 million), a record 84 changed hands in March, according to data from real estate consultant Property Monitor.
Buying real estate is one of the fastest ways of getting a residency permit in Dubai, which further eased coronavirus-linked restrictions on Monday. Emaar Properties PJSC, the biggest listed developer in the emirate, posted a 65% jump in villas sales in the first quarter from the year-ago period.
Demand picked up amid “a wave of government reforms over the past 12 months, attractive mortgage rates, and a shift in demand patterns due to Covid-19,” according to Morgan Stanley.
A gauge tracking real estate shares in Dubai has gained 7% this year, though it’s still down 74% from a peak in 2014.
©2021 Bloomberg L.P.
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