High oil prices, relocation to fuel UAE real estate recovery from COVID-19; Fitch

High oil prices, relocation to fuel UAE real estate recovery from COVID-19; Fitch

The UAE real estate market’s recovery from the COVID-19 pandemic is accelerating, supported by improving economic performance fuelled by high oil prices as well as increasing relocations, particularly from Russia, said Fitch Ratings.

However, some sectors, including the Dubai office market, may take several years to fully recover due to oversupply. The UAE real estate market was anemic during the pandemic, Dubai’s population fell by an estimated 8 percent in 2020 as many expatriates, who comprise about 90 percent of the population, had to leave after losing employment.

Furthermore, economic pressures affected the carbon and non-carbon sectors, including travel, hospitality and retail. However, an effective vaccination program led to one of the highest coronavirus inoculation rates globally, allowing the country to re-open for international business and tourism earlier than most countries. In addition, government initiatives to boost growth and competitiveness, including liberalized visa and residency rules, helped to increase the population.

These initiatives catalyzed the Dubai real estate sector’s recovery in 2021, with the population increasing by an estimated 2 percent. The country’s economy and real estate market have been further boosted in 2022 by increased oil and gas prices, particularly driven by the Russia-Ukraine war and the consequent redirection of global hydrocarbon