As Dubai continues to fight against the deadly COVID-19 pandemic, its economy is experiencing the dire effects of downfall. Businesses have closed, major events were canceled. Not only that, but the real estate industry is suffering. According to studies, residential property in Dubai is falling further than the 2009-2010 recession.
The global scenario right now may be drastic and depressing, but there’s still a silver lining in it. For real estate investors, they see this as a golden opportunity. Cheaper prices mean they can afford more to buy a residential property in Dubai. Here’s why today is the best time to invest in Dubai real estate.
Residential Property in Dubai Falling Amid Coronavirus Crisis
According to S&P Global Ratings, the prices for residential property in Dubai have fallen further than what they've last seen a decade ago. The institution added that real estate prices in Dubai are approaching new record-breaking low levels compared to 2010. It's also yielding a lower inflation rate if you consider the sales incentives generated from off-property sales.
The Global Ratings based their deduction on the following factors:
- Emaar Properties and Malls' BBB-ratings yields negative on CreditWatch.
- Damac Real Estate's rating downgraded from B+ to B. The experts see how their outlook remains negative as pandemic continues.
- Unlisted DIFC Investments re-affirms BBB ratings as they downgraded their outlook from stable to negative.
The Dire Effects of COVID-19 in Dubai Real Estate
The Global Ratings add that Dubai's economy is also severely hit by the widespread closure of businesses; ranging from small and medium-sized enterprises in tourism and retail. This phenomenon also dwindled the employment workforce of the Emirate.
Due to the widespread halt of businesses, including construction sites, the construction of residential property in Dubai will likely be delayed. Despite this downward statistics, the investors say this is the best time to invest in Dubai real estate. Here are their compelling reasons:
Cheaper Prices
As the stock market continues to tumble, some investors and businesses scramble to sell their residential property in Dubai. Since most people badly need cash nowadays, they’re willing to sell it at an even lower price.
If you have extra cash on hand, this is the perfect time to buy those properties you’ve been eyeing for a very long time. Some investors also opt to pull out a portion of their shares in the stock market to invest in real estate.
High Demand
As most governments order their people to stay home, there is an even higher demand to purchase real estate. Most people who are only renters or tourists who got stranded will need a place to stay amid the crisis. It’s also likely that these customers will stay for a month or so until the pandemic will end.
This gives you the perfect opportunity to earn some income amid the crisis. You can convert your residential property in Dubai and have it rented. Whether your customers want to rent it for a week or the entire duration of lockdown, you’re assured to have a steady income flow in the meantime.
Higher Bounceback
The world may be experiencing the biggest downfall in the century, but people remain positive we’ll overcome this crisis. Thousands of scientists around the world are scrambling to create a vaccine. This shows our resilience to overcome any hurdles we have.
It may take months or years before we end COVI-19, but the real estate investors already anticipated that. They predict a higher bounce back when everything goes to normal. As the stocks will skyrocket when business operations resume, so is real estate too. They anticipate the demand for residential property in Dubai will increase dramatically.
Interested to purchase a residential property in Dubai in these challenging times? Contact HBS Dubai!
