Dubai property market to improve on higher-than-expected demand -Morgan Stanley

DUBAI, May 18 (Reuters) - Dubai property prices are rising for the first time in six years, Morgan Stanley said in a research note, amid higher demand and a slowdown of project launches since 2017.

Citing research from consulting firm ValuStrat, it said there was a 1.2% month on month rise in residential values in April, the index's highest monthly growth rate in seven years.

"Demand for residential real estate has picked up faster than expected, amidst a wave of government reforms over the past 12 months, attractive mortgage rates, and a shift in demand patterns due to COVID-19," Morgan Stanley said.

It upgraded Dubai-listed Emaar Development to 'overweight' and raised its price target by 37% to 3.7 dirhams.

Some developers see recovery taking longer.

"The market is slowly recovering from the effects of the COVID-19 pandemic and its impact on various industries, particularly travel and tourism. I still strongly believe that recovery will take at least 12-24 months," Dubai's DAMAC Properties Chairman Hussain Sajwani said in a bourse filing.

DAMAC on Sunday reported a widening first-quarter loss of 189.6 million dirhams, versus a loss of 106.1 million dirhams a year ago.

Meanwhile, Union Properties, another listed Dubai developer, reported profit of 5.6 million dirhams for the quarter ending March 31, versus a loss of 121.9 million dirhams a year ago. (Reporting by Hadeel Al Sayegh; Editing by Alexander Smith)