The Emirates reliance on travel and tourism activities for its economy flow has been severely impacted with the onset of Covid-19- Now, the Real Estate sector and Governmental entities design a strategy plan to partly alleviate the burdens of businesses and individuals in the ecosystem
Dubai is predicted to see a boom in its real estate market after the impact of the coronavirus outbreak comes to an end, Richard Waind, Group Managing Director of Better Homes Company, told the local media. The coronavirus pandemic has had a ripple effect on all major real estate markets globally.
According to Waind, the current interest rate is at zero and the mortgage gap has been reduced by 5 percent for first time homebuyers and investors. After the effects of the Coronavirus are over, he expects Dubai’s real estate market to face a buyer boom as stakeholders will seek to capitalize on factors such as low interest rates and lower deposits.
This would increase working capital funding gaps for developers, including Emaar Properties and Damac Real Estate. Also, developers’ EBITDA margins are expected to contract significantly given that prices may be lower on new sales and that companies may offer discounts to existing customers.
Although Dubai’s real estate market has developed a positive outlook ahead of the World Expo 2020, the onset of coronavirus has slowed down its growth, although this is fairly beneficial to homebuyers and investors as they will reap good returns after market rebound.
Last year, it was reported that Dubai’s real estate market would stabilize in 2020, however, it can expect to see no meaningful recovery until 2022, according to ratings agency S&P Global.
Dubai-based Government and Real Estate companies have announced a relief package, designed to partly alleviate the burdens of businesses and individuals within the ecosystem, private retail real estate companies such as Majid Al Futtaim and Emaar Malls may also have to grant a rent freeze to allow tenants to manage their businesses, as is the case in other regions. Similar measures might also be extended by office real estate landlords, such as DIFC Investments, to support businesses that aren’t operating at their usual capacities.
The increased value of real estate trading transactions will be attributed to the direction of wise leadership in both government and companies and vision to promote economic development to ensure an attractive investment environment.