Compared to its counterparts in other countries in the region, the real estate sector in the United Arab Emirates has some distinctive features. It's primarily because, relative to nationals, the UAE is a temporary home for many expats, influencing their preferences and consideration when choosing a residential location.
For example, purchasing an apartment as an investment hedge against inflation or as an asset for the future generation is expected for area residents. It is not very common in the UAE because expats think they will leave the country sooner or later and go back to their home country. Another essential factor in the reality that not all residential supplies are available for purchase by foreigners, property ownership for expats is single in some regions in two types of leasehold and freehold. These factors have a widespread impact on demand in the area.
Top 5 Trends UAE's Real Estate Sector in Post Covid 19 Era
It is now evident that the pandemic of Covid-19 has changed the way we live and work forever. The virus has affected our workplaces, our homes, our outdoor spaces, any location. The latest coronavirus pandemic has struck every sector of the economy, including the previously stable real estate sector. In the turbulent times of Covid-19, both positive and negative opinions are shared on how the pandemic will impact the real estate industry in the UAE. However, both types of forecasts have argued that modernity and inclusivity would be part of the sector’s current trend.
As new patterns emerge, in a post-COVID world, the realty market will not be the same. The demand and supply dynamics will grow and change. Due to the excess of supply, taking into account the following observations, particularly with the crisis, the entrepreneurs could help stand out from the competition:
1. Focus on Safety, Sanitation and Optimization
Abu Dhabi and Dubai have been named the top two most liveable cities in the Arab world, respectively. According to the new Global Liveability Index released last March 2020 by The Economist Intelligence Unit, this key trend will shore up the local real estate sector’s direction to fast-track recovery.
In terms of consumer demand, we are moving toward a new path that will zero in on the central concept of health and safety in the new standard’s face. In many sectors, especially in real estate, the UAE's top rank in the liveability index will pay off, helping us mount a strong comeback, this rebound will be developed as the safest nation in the world by the remarkable global feat of the UAE.
It will pave the way for expanding property designs in the next decade to automate protection and sanitation principles.
2. Preference for Lower-Density Properties
As most prospective developers, owners, and residents alike would opt for more livable spaces to adapt to the new standard, there would be a strong demand for lower-density properties and locations. In high-density properties, the coronavirus pandemic has highlighted the greater operational danger of contagion. The higher the occupant density is, the greater the chance of infecting others. The industry is rethinking the layout of the room to maintain new distance criteria.
Also, optimisation of improved property standards, mixed-use projects, and digitalisation include other evolving real estate and property trends that will enjoy a share of new demand.
3. Boosting Property Standards
Since market tastes are expected to change to new standards, property developers can see the need to analyse construction specifications and have improved facilities, such as comprehensive retrofitting. Furthermore, by allocating additional spaces and contingent designs that solidify different facets of safety and bring more value to prospective developers and tenants, construction layouts will see a significant revamp.
In the new normal, to ensure protection against any viruses or diseases, people would always have the mentality to observe the physical distance. For many buyers, it serves as a guiding principle when selecting a land.
4. Mixed-Use Community Development
As individuals are now more concerned about health and safety requirements due to the pandemic, developments in mixed-use, or those that combine commercial, residential, and industrial activities into one location, will turn out to be one of the most sought-after properties in the new normal. An increased number of developers will develop residential projects closer to or include health and lifestyle centres, retail stores and supermarkets, and learning institutions.
The concept of a "community within a property" would be implemented by this form of development. More tenants are likely to refrain from moving excessively for a while to avoid crowded areas.
5. Digital Adoption
The idea of virtual reality was already gaining too much popularity even before the dawn of COVID-19, allowing prospective property buyers to explore the property without a physical visit.
The COVID-19 pandemic has strengthened the need for alignment with the UAE's digital transformation vision for the private sector, including real estate. The industry is changing business experiences dramatically.
By embracing artificial intelligence and smart technology, developers can ensure that they are still within their customers’ scope with the aid of the customer relationship management (CRM) platform and enterprise resource planning (ERP) systems.
The real estate industry has been swift to embrace digital solutions, like all others. The crisis has unwittingly taught us that there are varied and cost-effective ways to pursue human activity. The planet has now reached a digital-irreversibility zone. The real estate industry will adapt and feel the effect of digitisation. The digitisation will dominate most of the processes, whether sales, capital deployment, property management, virtual tours, or even consumption habits.
Post-COVID-19, a revolution in how people think and live is going to occur. The attitude of the buyer would positively be affected. Employment instability decreased incomes, investments and company volumes have compromised cash flows to the real estate company. On the positive side, the real estate industry has reacted rapidly to changes and adapted to emerging technologies; this is evident in the digitisation of so many processes. The Covid-19 pandemic has brought about significant changes in investment priorities with the democratisation of digital media and new investment avenues, which will continue to outlive the pandemic.
The real estate market in Dubai has its own set of challenges, including understanding the standard specifications and laws of enforcement of the country. You need the right business consultant to take you through the business start-up phase if you plan to develop your real estate services in Dubai. Get in contact with us for more.