2020 was, undoubtedly, the most anticipated year for UAE residents due to the much publicised and awaited Expo 2020 event. However, the unexpected happened due to COVID-19 and it is now shifted to 2021. This is not the only change that has happened in Dubai due to the novel coronavirus. Dubai real estate trends have changed as prices for properties have become unstable.
Reduced Demand for Apartments
With salary cuts and downsizing, a lot of people faced (and are still facing) financial distress. This significantly affected their purchasing power. As they had to rely on their savings to make their ends meet, making investments in the real estate sector or pursuing their plans to buy a new residence in Dubai became a secondary option for them. This led to reduced demand for apartments in the city, which were earlier considered as hot properties as they were sold immediately. Studio apartments, in particular, were sold rapidly but their demand was affected a lot recently.
Although this isn’t a new trend, a lot of people in Dubai have turned to shared rental apartments to keep their living costs in check. Since rent consumes a major portion of the monthly budget, cutting it down has helped them to manage their finances effectively and survive in these testing times. For families, this isn’t an option but bachelors can opt for shared rental apartments and reduce their living cost in Dubai.
Since the developers/sellers/property owners have several apartments up and ready for sale, they are showing more flexibility to lure in potential customers. As they also have to manage their funds, they are willing to go an extra mile to ensure their assets get liquidated at a rapid pace. Those who can afford, they can make use of this flexibility shown by developers to grab an opportunity and add more property(s) to their portfolio.
Tenants who were earlier located in apartments or penthouses located in posh areas, they have now shown their keenness to relocate in areas that are more affordable for them. This is due to the pay cuts and downsizing caused by COVID-19. In order to manage their finances efficiently, many renters are in a lookout for areas or places where they have to pay reduced rents. This trend has not only surfaced in Dubai but Sharjah as well.
Surprisingly, the demand for bigger spaces such as villas for rent in Dubai has shown an upward trend. As people were locked in their own living spaces, those who lived in smaller apartments faced great difficulties. It proved tough for them to pass the lockdown period because of limited and congested living space with nowhere else to go. Furthermore, they weren’t able to use several shared amenities. For example, swimming pools and fitness centres had to be closed to negate the risk of the virus.
This is the major reason why the trend of shifting to bigger and spacious homes surfaced after the lockdown. Many people realised the importance of having bigger spaces where they can live and breathe easily and have sole authorities over the amenities and facilities available.
The changing trends in the real estate market of this region have surely made things favourable for buyers. If they have resources, it’s an ideal time for them to buy their dream home or invest in a residential property. At the same time, the situation is challenging for developers and sellers as not many buyers are inclined to buy properties due to lack of resources.