The year 2020 has ushered in a paradigm shift across various industries, including the real estate sector. Particularly in the region, market experts and professionals could observe several trends as a reaction to the signs of the times. But, will these trends remain as a new industry normal? What are the changes that post-COVID 19 lockdowns had ushered in? And with the looming Expo 2020, what could we envision for the state of the real estate market in the future?
MARKET TRENDS AND DEVELOPMENT CHANGES POST COVID 19 LOCKDOWNS
The quick spread of COVID-19 had changed the world almost overnight. Shops closed, offices relocated to the safety of everyone’s homes, tourism halted, and most of the modern living had to stutter to a stop. As an expected result, the stock market had taken a hit from the world stopping.
In the UAE, businesses were swiftly made to work from home following the announcement of the lockdown. Land Sterling itself was one of the many businesses that felt the effect of COVID-19 into their bottom line. The company’s income has gone down by 40%. Obtaining new business and collecting outstanding fees had proven to be very challenging.
Consumer spending trends have also shifted. Consumption itself has been significantly reduced. E-commerce has found a way to thrive. Hospitality, luxury retail, education and travel sectors had to change and adapt to the new normal to survive.
The ones who weren’t able to adapt quickly had folded up. Restructuring had been rampant through companies that tried to weather the worst of the pandemic.
And the ones who managed to see through the worst could be found to have adapted flexible and digital business models that helped them overcome the challenge. Some of these companies merged and acquired promising companies that were about to crash. It wasn’t until June 2020 that things started to look up.
Real estate companies and developers were the ones that had to adapt quickly and think on their feet. With close monitoring of consumer behaviour and trends, surviving developers noticed consumer preference for more spacious homes and smart co-living spaces. As a result, they had to scale and re-engineer projects to accommodate rising demands borne out of strict lockdowns: home workstations, ample space for family, and co-living trends.
EVALUATING THE TREND AND LOOKING AHEAD
Will the current market trend stay as it is right now? Suffice to say; the market is in a transition period. Until consumers and suppliers have finally adjusted according to the needs and wants of the industry, the market may see trends go up or down.
The property market, encompassing residential, commercial and industrial property sectors, will find decade-low prices over the next six to twelve months. Easy financing plans are set to stimulate growth and re-open the economy for business.
The market is also expected to enjoy competitive prices and rentals for developers and landowners. In addition, incentives are also put up to make the market more attractive to investors, such as free service charges, rent-free periods, quality products, and more.
Market players such as financial institutions, developers, landlords and investors will have to carry out comprehensive due diligence before any business deals.
EXPO 2020 AND ITS EFFECTS ON THE REAL ESTATE SECTOR
With less than three months away from the highly anticipated event of the decade, a lot is expected on the success of Expo 2020. The original objective of Expo 2020 is to set Dubai as an ideal destination for innovation and new businesses. Visitors and investors worldwide will fly to Dubai and see the emirate as a potential second home for them. If all went according to plan, Expo 2020 will increase the demand for real estate, open up jobs and improve tourism.
For Land Sterling, we believe we have our share of participation for Expo 2020. Our services will be in demand, especially for asset management, PPC services and consulting jobs. We are more than ready to help secure jobs and introduce potential investors to their dream completed projects once Expo 2020 starts.
This far ahead of the event, we have noticed an increase in international enquiries related to various real estate services such as sales and acquisition of residential units. In addition, commercial services like opening new offices and obtaining new development lands for potential hospitality projects have also increased. Surprisingly, the enquiries have come from countries the UAE has recently signed treaties and where Dubai has promoted FDI incentives.
The COVID-19 pandemic has brought with it many challenges and changes. To survive, most companies have to be quick on their feet and be flexible. Market trends have also surfaced from the paradigm shift. Developers found spacious homes and home offices rose in demand among consumers. Companies acquired and merged to keep themselves afloat and to weather the worst of the lockdown. Until the market has found its footing, trends like this will rise up and down.
As the last of COVID-19’s effects die down, the excitement of the highly anticipated Expo 2020 will surely pick up the market. Investors and tourists are expected to flock to Dubai and see the emirate as an ideal investment destination.
Land Sterling is always ready to provide our services to potential investors, from valuation services to sales and acquisitions. Things are starting to look up for Dubai as previous initiatives such as signing treaties and offering FDI incentives to partner countries have begun to bear fruit. And if all goes well, the real estate market is one of the many sectors to enjoy the benefits of this new world.
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