Nearly 75 per cent of respondents who are renters in the UAE and had renegotiated their lease in the last 6 months say their rent fell, stated Peninsula Real Estate in its second edition of UAE and Mena Home Sentiment Survey – Q2 2020, which was conducted in partnership with Eltizam Asset Management group, CBRE, Cityscape and Berkshire Hathaway Home Services.
A third of these respondents reported that their rent had fallen by 10 per cent or more, it added.
The survey that was conducted over the first two weeks of July provides an important snapshot of sentiment towards real estate as many of the Covid-19 mitigation measures are being relaxed, based on a compilation of 2500 data points including home owners, renters and investors across the region.
Around 84 per cent of respondents who are renters expect to see their rent decline.
The survey brought out mixed results as in Saudi Arabia, 40 per cent of respondents expected rents and prices to fall in the second half, while only 8 per cent of respondents expect the same outcome in Egypt.
Interestingly, 70 per cent of respondents in the UAE think the rent they pay is fair or good value for the property they lease.
Dr Christopher Payne, Chief Economist, Peninsula Real Estate, said: "Not surprisingly, our second home sentiment survey has demonstrated poor sentiment towards real estate in the Gulf. Rental negotiations incorporate market movements over the previous 12 months, which may be why owners’ expectations for the UAE are more positive than renters for the remainder of 2020."
According to him, owners’ perceptions are both more positive for the second half than renters and reflect improved sentiment when compared to their views on the past six months.
No doubt reflecting Covid-19’s impact on an already weak market, 50 per cent of respondents thought the price of their home had fallen by at least 10 per cent year-to-date, stated Dr Payne.
Eltizam Asset Management CEO Chris Roberts said: "The survey results reflect the negative sentiment brought on by the Covid-19 pandemic, and its significant impact on the global economy during Q1 and Q2."
"Eltizam believes that the UAE government’s recently announced economic stimulus programmes, in tandem with the gradual re-opening of various economic sectors hard hit by the shut-down, will see the sentiment shift higher during H2," he stated.
A leading UAE-based physical asset management company, Eltizam provides best-in-class services for the built environment (residential, commercial, retail, industrial and infrastructure asset classes) supporting asset owners to maximize long term returns on assets.
According to Roberts, the variance in sentiment expressed by the UAE and Saudi Arabia respondents is explained by a number of factors, including the higher proportion of expats in the UAE compared to Saudi Arabia.
"The impact of the pandemic on the economy and incomes of the expat population could negative impact the demand for residential real estate. Meanwhile the sentiment in Egypt, which has very few expats, remains bullish as real estate continues to be viewed as a safe and attractive inflation-hedge," he added.