The coronavirus pandemic has certainly disrupted real estate industry across the globe. During the lockdown, people were confined to their homes without the ability to look for a new place or move from their current residence. As the restrictions eased, it was still challenging to conduct viewings and to convince landlords to allow visitors into their homes. At the same time, the tenants didn’t feel comfortable changing their homes post-outbreak.
However, the market bounced back in an unbelievable manner. Just over the last two months, the real estate market in Dubai has defied many predictions of gloom and doom while showing impressive resilience! At Betterhomes, we have seen a 100% increase in the number of new sales agreed compared to June 2019!
So, what has been driving this?
Firstly, we have to understand that all residents in the UAE experienced a strong emotional reaction to the lockdown period, which suddenly changed the value people are placing on the space they are living in. In a city where 85% of the population are expats, most of the residents don’t usually get attached to their homes. If we consider the fact that it is also widespread to change your home every year, we realise that many people will not put much effort and time into their living space.
However, during the lockdown period, people have fallen in love with their homes again, while getting strong desires to upgrade their existing residences and find new homes with space for indoor workouts, gardens, terraces, and other features they haven’t considered before. Among other factors, the emerging trend involving work from home plays a vital role in the way people perceive their homes. While most people are still working from home due to the current situation, several businesses have already announced that this might be a permanent structure for a part of their workforce. This also means many are considering homes with home offices and enough space for everyone to work from home at peace.
Most importantly, the desire to have a perfect home is now matched with an affordability that has not to been seen in the UAE property market for over 10 years. If we just look at the past six months, it is reasonable to consider that the property that was worth AED 1,000,000, will probably cost around AED 900,000 today, which is an estimated decrease of 10%. To purchase this property in January 2020, you would have to put down a 25% deposit, which amounts to AED 250,000. Today, for the same property you would need AED 70,000 less. The regulations have also changed in March this year in favour of first-time buyers that are now required to secure just 20% as a deposit. Let’s not forget buyers will also be saving around AED 6,000 on lower DLD and agency fees. Another favourable factor is the fact that the interest rates have been reduced by 25%, which means you will also be saving on your monthly mortgage payments, with savings of around AED 700 per month.
A lot of first-time buyers looking at these numbers concluded that buying a property makes a lot of sense since they will be paying less for a property than a few months ago, their down payment has decreased, and their monthly mortgage repayments will be lower. If you are also looking to buy a property in Dubai, feel free to go through our buyer’s guides or contact us at [email protected]