The fast-spreading coronavirus which has now infected more than 4 million people worldwide has triggered a series of lockdown and travel restrictions within the country as well as international travels. With the outbreak of the disease, the world economy has taken a great hit, the stock market is seen crashing down. It has affected almost every sector of the industry, particularly the global real estate industry at this time.
Many scientific laboratories are working round the clock to find an effective vaccine to put an end to this global crisis. Living in lockdown, social distancing, working from home has become new normal for today’s life. Many governments have already advised their citizens that they must learn to live with this virus.
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The hard hit on Dubai’s Property Market
Dubai is considered as real-estate destination and has seen an uptick over the years. However, the coronavirus pandemic is threatening to undo all good that has happened in the industry. The property industry had suffered a lot due to this pandemic as it is a demand-based industry. The demand for workspace and other residential property has gone down drastically.
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Figures from Dubai Property Finder showed that the number of rental real estate listings this week went up by 6 percent and 5 percent for sales compared to the previous week. Rental leads for villas in Dubai also increased by 11 percent, a trend that was not observed before the lockdown period.
“In the previous weeks during the lockdown, we also started to see an increase in searches for villas/ townhouses, outside space such as gardens and balconies and pools in villas. This is a clear indication that people are vaping personal, outside space in their homes,” Lynnette Abad, director of research and data from the Property Finder Group, said.
“Before the COVID-19 pandemic, the market was on a growth trend in terms of property purchases. For the moment, that trend seemed to be put on hold. It is just too soon to measure what longer impact, if any, the economic consequences of COVID-19 will have on the UAE real estate sector,” Tuaima told Zawya last week.
Restrictions on travel and other mobility restriction have imposed by the government to contain the spread of coronavirus has hit the property market alongside low consumer and business sentiment. S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak.
Future Prospect of Dubai Property Market Post Covid-19
With the ease in lockdowns, the Dubai property market is showing some signs of returning to normal, according to the latest data.Dubai with its record is known for its bounce back faster than any other destination globally when recovering from Global calamity and is expected to have an influx of new residents as it will present itself as an Opportunity Destination. Dubai also provides peace of mind to investors even during times of global uncertainty.
Many property developers are hopeful and confident that crisis is temporary in nature and property demand will increase afterward. The expectation of influx of new ex-pats especially from developing countries as opportunities abounds in Dubai. Experts are seeing the possibility that resumption of marketing and advertising exercises will enable the businesses to thrive in this constrained environment.
Investors and end-users have started taking interest to invest in Dubai properties as the interests are now effectively zero (base rate) and mortgage cap being lowered by five percent for first-time buyers.
With the impact of coronavirus stock market has plunged and with its unpredictable nature, losses are expected further with it bounce back trends upward. Hence the stability of investing in brick-and-mortar could keep you better protected over the medium and long term given the right property purchase.
“At Mortgage Finder, we have seen a 27 percent increase in mortgage inquiries for last weekend compared to the previous weekend,” said Richard Boyd, director at Mortgage Finder.
“Many of the inquiries are coming from those who are interested in securing pre-approval now in anticipation of buying a property in the next few months. Pre-approval is the first step in the mortgage process and having this in place early in the property search puts a potential buyer in a stronger position when it comes to moving forward with a transaction,” Boyd added.
“The Dubai market is matured enough to adopt very fast with the current market trends. Last year, we successfully opened to abroad market attracting many new investment destinations. By far the year 2020 seems to be local buyers and in real estate dictionary we call it a ‘buyers’ market’ as prices are very attractive to buy, which allows developers to target and focus local base audience,” says Salah Omar, marketing and PR director of A1 Properties.
The nutshell story is that Dubai’s property market will not struggle for a longer period due to coronavirus pandemic, hence it could be the right time for property investment so that when the market rebounds you can enjoy your yield.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 properties and homes to live in and generate secondary incomes.
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