Like all other businesses, COVID-19 has slowed things down - momentarily - for the UAE’s real estate sector. The year had started on a positive note for the property market just before the pandemic tightened its grip on the economy.
This is not the first time uncertainty has loomed on the real estate industry and this won’t be the first time the sector rearranges and reboots itself to sail through rough times. Real estate companies that have withstood the test of time know from experience that there is no reward for spectatorship during an uncertain climate.
The UAE government has been exceptional in announcing various plans to support the industry, but companies operating in the sector too have to stay vigilant and be prepared for the new normal after COVID-19 transforms how people finance, operate and occupy real estate.
Dubai’s property sector was hopeful about seeing positive growth during the Expo, which has now been postponed to October 2021. When the event does take place, the nation’s real estate industry will be ready to embrace a deserved growth curve.
A break of sorts
In a recent article, a reputed developer mentioned that this time will give Dubai a much-needed break from new projects, which will help reduce the problem of over-supply. This echoes the sound advice of Deepak Parekh, Chairman of India’s Housing Development Finance Corporation, who had asked developers in India to focus on completing existing projects rather than launching new ones in this climate.
This slowing down is an opportunity to help developers pay closer attention to what end-users want from their homes or workspace rather than rush to build and supply new residential and commercial units. Earlier this year, research firms had predicted around 50,000 units to hit Dubai this year.
A different perspective
In just a few weeks, homes have turned into a place to work from, study, workout and relax in more ways than binge-watching Netflix. People are likely to carry forward the memory of these times and want homes that are suitable for all purposes. Several agents have reported an increase in inquiries for villas and townhouses with gardens, balconies and pools during the weeks of the country’s sterilization drive.
Residents who have been delaying investment in a home are likely to make that decision right after the pandemic. A Dubai-based consultant reported an over 25 per cent increase in mortgage inquiries since the relaxation in movement restrictions. The Abu Dhabi government has waived off (for the entire year) real estate registration fees of 2 per cent - this might encourage individuals who are currently renting to purchase a property.
Deferred payment options, easier mortgage plans, landlords accepting payments through more cheques are all likely to encourage more residents to purchase a home. The easier finance plans may even encourage the entry of a new crop of investors, though overseas investments may take longer due to travel bans.
Post-corona, landlords, and agents cannot afford to shy away from going digital and that does not mean a gallery of outdated, low-quality images on a website and social media handles. The feeling of physically being in a place that one is going to live or work in, feeling the light, sound, and vibe of that space is irreplaceable.
A property that can be toured virtually and has all relevant information easily available online will be preferred by customers.
During the lockdown, people are listing as well as looking to rent and buy property online more than ever before. The proptech company Urban revealed a 60 per cent increase in daily active users this month as more tenants look to secure a rental property online even with the movement restrictions.
Developers and agents who are able to keep up with the emerging online trends efficiently will be able to grow steadily on the other side of COVID-19.
- Haleema Al Owais is CEO, Sultan bin Ali Al Owais Real Estate.