Real-Estate Is Ever Growing Field. How Corona Has Affected This Industry
Dubai is a global real-estate destination. Over the years, the sector has seen an uptick. But, the coronavirus pandemic is threatening to undo all good that has happened in the industry.
Amidst the global economic crisis precipitated by the Corona pandemic, let us find out how the real-estate sector in Dubai will fare.
Real estate is an ever-growing field. The sector was booming in Dubai until the global financial crisis of 2008. The crisis led to a near-collapse of the sector. Only recently, the sector has picked up momentum. But, the COVID-19 pandemic is threatening 2008 redux.
The real estate boom of recent years in Dubai was majorly due to expatriate investors. From the hospitality market to the residential market, the expatriates have been the force behind the realty boom in Dubai. Also, the sector restructured itself to become attractive.
For years, there was a glut in the property market, and the demand was limited. The prices too were high, compared to what it should have been. The government intervened and restricted supply and eased residency rules for its expatriate population. This resulted in realty prices falling, with 2019 witnessing a fall in prices for the fifth straight year.
But the pandemic led lockdowns across the world left the real-estate sector in Dubai vulnerable.
Dubai is mostly dependent on its tourism and business services for revenue. The city emirate has been one of the must go to places for business across the world.
The unprecedented global lockdowns have led to dwindling tourist arrivals and business interests. The UAE airlines itself grounded its entire passenger fleet to restrict the spread of coronavirus disease. These measures are reducing demand.
Expect Low Demand
Demand appetite is key for the sector and has seen an uptick in the first few months of the year. But since March, concerns are rising due to the global shutdown.
The hospitality sector may not venture into new projects until the crisis passes. Already, half the malls in the city are yet to find tenants. And, businesses are laying off people and are forcing employees to take unpaid leaves, according to ‘Middle East: Coronavirus: implications for MENA businesses and their leaders’, a survey by The Economist Corporate Network. All these points to sluggish demand in the coming months.
But, some major property developers are opining that the crisis will only be temporary. They are confident that the demand will increase afterward. The expectation is that an influx of new residents will take place, especially from developing countries as opportunities abound in Dubai.
Activation of marketing and advertising exercises can enable the businesses to thrive in this constrained environment and sustain itself for the benefits laid out for the industry when the dark cloud of the pandemic is cleared out of the skies.
We should consider the current phase as a little hiccup and expect the sector to surge ahead after the crisis. Since people would still want to have their own properties and homes to live in and generate secondary incomes. Soon, Dubai will once again be among the top realty destinations of the world. For more details visit www.ics-dubai.com