Covid-19 Impact: Is it the right time to buy properties in Dubai?
What a year 2020 has been? It was one of the worst years in human history. It will be remembered as a black year. The damage it has caused will take years to recover and the economy will also need more than just financial aids and policies to get back on track to pre-pandemic levels. Every industry suffered huge losses and is on the path to slowly recover and analyze the damage.
With the economy slowly getting back on track, the confidence in real estate is returning too. There is a fundamental shift in human behaviors that the industry has to account for. With work-from-home becoming the norm, the need for larger space is also on the rise. Also, in order to be more comfortable and as precautionary measures, people are preferring to stay indoors and the conventional environment of the home is thus changing.
Interestingly, despite the pandemic, Dubai real estate saw a roller-coaster year where transactions materialized and buying sentiments were abounding. Although, during the initial quarters of the year, when Covid-19 was at its peak, the Dubai market saw a slump in demands, but slowly the demand picked up when the economy started opening. The market saw the most transaction is ready to move in villas and townhouses, coupled with growth in the off-plan sales segment as well. On average, Dubai saw 570 sales per seven days in the month of June’20.
The Tide of Changing Times
To keep up with the changing times and needs, Dubai Land Department introduced an online property transfer solution. Innovative solutions like this have proved beneficial to the property market in Dubai. Once the registration trustee offices opened with a reduced workforce, the buyer looking to close a deal could book an online appointment a day before. They could send the related documents in advance through email. That way, physical interactions reduced to minimum. This online procedure remains in place even when the economy is up and running now. The property registration in Dubai can be completed online completely.
In order to regulate developers and developments in Dubai real estate landscape, the government has formed a committee. The main purpose of the committee was to implement proper urban planning and keep an eye on what kind of projects were being developed. This was a welcoming impetus to growth for the sector.
Migrations too are another factor helping the shift in the way property investment is looked at. Now it is not only confined from rural to urban cities, but also from tier 3 to tier 2 to tier 1 cities. This has given rise to higher demands in all areas of Dubai. Automatically, the developers no longer could afford to remain with smaller projects, to meet the demands, and hence a shift to bigger projects like megaproject is the necessity of the hour.
In order to launch and complete these mega, epic projects which are like developing a new city altogether, the support from the government becomes super essential. Local political support, financial funding, and pulling money for these projects, require the support of the local authorities.
Moreover, the development of these projects also requires large manpower, visa needs for the teams, permits for road construction, water pipelines, and drainage. The key to being adequately staffed and connected rests on the permissions they acquire from the authorities.
Another shift that has been observed during and now after the receding effect of the pandemic is the need for healthy living. Pandemic has made a tectonic shift in the way we use to perceive our environment and our homes. The demand for environment-friendly homes is on the rise. The industry has to focus more on sustainable housing. The old buildings would soon become obsolete from regulation perspective. The demand would also change accordingly. The new generation prefers spacious abode. The developers need to heed what this generation demands as it may be difficult to satiate their choices.
The Road Ahead
So, the question is why people are looking to buy properties right after lockdown and a global pandemic of a lifetime? The answer seems simple – avenue of change.
Now when the travel is restricted and home has become a place where the office is, also schools for children, the need for bigger and spacious homes has emerged. In order to enjoy all the good things in life in the restricted environment, the emergence of queries of pools and gardens increased for home buyers.
People spent a major part of their year indoors and have come to realize that deriving pleasure at home requires a comfortable stay. Massive surge in home buyers could be attributed to this fact of a shift in human behaviour, where people prefer home cooked food versus outside foods, and eCommerce became the go-to place for grocery, to clothing to medical to all other needs as we can perceive.
The new normal is spreading its foot in the lives of millions and it is the same in Dubai too. Backed by the goodies made available by the government in terms of low lending interest rates, the cost of borrowing has become cheaper. This has made mortgages affordable.
Another aspect of investing in properties during the pandemic could be attributed to the fact that it helps in diversification. When the stock market is volatile, precious metal prices are hovering at rock bottom, this investment could give you benefit in the long run.
Dubai real estate has its own reputation of being a lucrative location for investment. Adding to that is the ease of doing business, strong infrastructural framework, government spending, and policy structure, Dubai is already on a path to recovery. It is well equipped to give alluring returns to investors.
Resetting goals and obliging the new normal, Dubai is all set to offer long-term growth and emerge victorious from this crisis, reinstating its reputation of being the preferred choice amongst the buyers looking for the most lucrative investment options.