The global pandemic has shifted the attitudes and demands of residential buyers in the Middle East, data from the Knight Frank Global Buyer survey shows.
Results from the survey, which was conducted between June – July this year and reflects the attitudes of over 900 Knight Frank clients across 49 markets worldwide, suggest that post-pandemic, investors are seeking spacious and sustainable homes in suburban or rural locations.
Imposing stay-at-home mandates and restrictions on travel, the COVID-19 pandemic provoked many to reassess their current living situation and place greater emphasis on their work-life balance. This requirement for remote working and home-schooling has driven interesting attitude changes amongst Middle East investors in particular.
THE RACE FOR SPACE
The vast majority of people in the Middle East live in cities (95%), compared to a global average of 68%, the survey found. When asked about their next home purchase, 57% of respondents in the region said that their preference would be for a villa or a home located in a rural location. This is slightly higher than the rest of the world’s respondents, at 51%.
“Unlike mature cities across the world, which often have very defined cores and sprawling suburbs, cities in the Gulf are still in expansion mode, which means there are multiple focus communities, where the majority of people live. Despite this, the pandemic has fuelled aspirations for bigger homes, much like the respondents from elsewhere in the world,” said Faisal Durrani, Head of Middle East Research, Knight Frank.
In the six months to June 2021, Dubai’s residential real estate market showed signs of rapid recovery with villa values rising by almost 8% and rental prices for villas fuelling a 5% overall rental prices.
Much of this demand is driven by investors seeking homes with outdoor spaces, after the pandemic reasserted the importance of gardens, patios, and balconies. The survey found that for just under a fifth of respondents in the region, proximity to green spaces and good air quality were the most important location features.
GREEN IS THE NEW BLACK
As ESG factors become increasingly relevant to investors globally, home buyers are assigning more importance to the sustainability of their properties.
In the Middle East, sustainability tends to be an especially hot topic in comparison to the rest of the world, with more and more investors opting for homes which satisfy stringent ESG targets. According to the survey, the energy efficiency of homes is a ‘very important’ issue for half of responders in the region, compared to 42% of investors globally.
“Green is definitely the new black, and in the Middle East, buyers are increasingly focused on all things ESG,” Durrani said.
The motivations behind the demand for energy efficient homes varies, with environmental regulations and their associated impacts on a property’s value, and personal preferences for greener homes among the top driving factors.
With the 2021 UN Climate Change Conference (COP 26) in Glasgow set to kick off at the end of October, many governments around the world are pushing forward the sustainability agenda. Last week, Mohammed bin Rashid Al Maktoum, the Prime Minister of the UAE and Ruler of Dubai, unveiled an ambitious target for the UAE of achieving net-zero carbon emissions by 2050. These goals set the UAE aside as the first Persian Gulf nation to pledge long-term plans to eradicate carbon-emissions.
Branding 2021 the “Year of the Green Re-awakening for real estate,” Durrani commented that, “this should send a very strong signal to developers and planners around the region about how important ‘being greener’ will be in driving the success of new projects.”
Photo credit: www.bayut.com/mybayut/top-ten-sub-communities-of-arabian-ranches/
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