Dubai is the business hub of the Middle East and the real estate market has been booming in the last few years. The demand for luxury & affordable housing & villas was on the high until the arrival of the pandemic. There is a big disruption in the market due to Covid-19 in 2020 and the recovery will be time-consuming.
It is expected that market share is going to reduce a few notches this year but gradually will gain pace in the following years. The owners & occupiers had to make the necessary adjustment in response to the restrictions on mobility & capacity. The year 2021 will see the desired results in structural shifts for residential & commercial real estate in Dubai. The primary priorities or considerations across all sectors are financing, cash management, and lender considerations.
The need for quality is expected to grow in the real estate sector and the prime assets with limited upcoming supply will be focusing on the maintenance of occupancy levels by offering competitive rates as well as incentives on a case-by-case scenario.
Dubai government announced several stimulus packages for the industry last year during the pandemic and this year also there are going to be incentives for the market to gain momentum. The TESS (Targeted Economic Support Scheme) launched by the Central Bank will be extended this year for business benefits. It is allowing the private sector & individuals affected by the pandemic to tap into the Dh50 billion zero-cost facility so that customers can defer their loan payments.
The demand for office spaces will remain high in Dubai as it is the most preferred location for business setup. There has been a disruption in office space usage as a result of the remote working model needs by the pandemic, first during the 24-hour restrictions in April, and the time since then with returns to work policies across the organization.
Tenants are in the driving seat in the residential sector too with wide-scale migration to large units with the best amenities. It is very easy to afford to house and capital values have remained under pressure as investment has declined due to the pandemic.
The office adoptions are likely to migrate some of the reduction in demand arising from higher levels of home working in 2021. The short-term design will be about making do with what is present there’ and cash preservation remains the top priority for the sector. The demand for space is likely to be driven by long-term office adaptions.
There is hope in 2021 and 2022 for real estate market recovery alongside making up for the losses due to the pandemic. As we are moving back to our normal lives, it is expected that the demand for office or residential space in Dubai is also going to increase with time.