Post Coronial - a look at the real estate landscape
2020 had started on a positive note for the property market just before the pandemic tightened its grip on the economy and, along with other sectors, Covid-19 has momentarily slowed things down for the UAE's real estate sector since.
However this is not the first time that uncertainty has loomed on the country's real estate industry and this won't be the first time when the sector reboots itself to sail through rough patch.
Real estate companies that have withstood the test of time in the past know from experience that there is no reward for spectating during an uncertain climate. The UAE government has been exceptional as always in promptly announcing various plans to support the real estate industry, companies operating in the sector too have to stay vigilant and be prepared for the new normal post-Covid-19 which is transforming how people finance, operate and occupy real estate.
In a recent article, a reputed real estate developer mentioned that this time will give Dubai a much-needed break from new projects which will help reduce the threat of over-supply. This resonates the sound advice of Deepak Parekh, chairman of India's Housing Development Finance Corporation, who asked developers 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 residential and commercial units.
In just a few weeks, homes have turned into a place to also work from, study, workout at, 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 and everyone occupying it. Lynnette Abad, director of research and data from the Property Finder Group shares, "In the previous weeks during the lockdown, we also started to see an increase in searches for villas and townhouses, outside space such as gardens and balconies and pools in villas".
Residents who have been putting away investing in a home are likely to make that decision right after the pandemic. Dubai-based Mortgage Finder recently reported a 27 per cent increase in mortgage inquiries since relaxing movement restrictions. The Abu Dhabi government, for example, has waived off (for the entire year) real estate registration fee of two percent; this might encourage individuals who are currently renting to purchase a property. Knight Frank's Impact of Covid-19 on KSA and UAE Real Estate Market - 2020 report predicts softened lending policies in banks.
Deferred payment options, easier mortgage plans, landlords accepting payments in more cheques are all likely to encourage more residents in Dubai and other emirates to purchase a home. The easier finance plans may even encourage the entry of a new crop of investors albeit international investments taking 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, but people are getting tech-savvy and look around online before visiting a property. A property that can be toured virtually and has all relevant information easily available online will be preferred by customers.
During the lockdown, people were looking to rent and buy property online more than ever before. UAE based property technology company Urban revealed a 60 per cent increase in daily active users this month as more tenants look to secure a rental property online under the current coronavirus-induced movement restrictions.
All in all, we call it Real Estate because it is in fact 'Real'. It is a tangible commodity and will always hold its worth and value as a finite asset. The second half of 2020 will see a buyers market, which again is a part of the industry's trend cycle. What is imperative is the rate of trade and transactions that will determine the industry's buoyancy.
Developers and agents that are able to keep up with the emerging online trend efficiently, respond promptly to the evolving market requirement, and maintain a strong customer-centric approach will be able to grow steadily on the other side of Covid-19.
- Haleema Al Owais is CEO of Sultan Bin Ali Al Owais Real Estate. Views expressed are her own and do not reflect the newspaper's policy.
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