I recall when over a decade ago, as Dubai weathered the global economic downturn, the headlines were dominated by the impact on real estate, stalling projects, rampant speculation, and the plight of buyers and investors that were left stranded.
Times have changed significantly and even as we are ravaged by the worst crisis of modern times, COVID-19’s impact is being felt across the globe and different sectors, with real estate not the worst hit.
According to Savills, the global real estate consultant, the pandemic is likely to only disrupt the UAE’s real estate sector in the short-term. So, what are the factors that lend credence to a positive outlook for the real estate sector in the long-term?
The first and most critical component is speed. Most of the GCC countries have taken swift action and put in place a range of measures to control the spread of the virus. These measures, mostly enacted about as early as mid-March, have been vital in containing the spread.
Secondly, as part of its commitment to support the businesses and residents during these challenging times, the UAE government has come up with a range of economic stimulus packages.
While the UAE federal government’s stimulus package is to the tune of $27.2bn (AED 100bn), the government of Dubai also unveiled a $408.3m (AED 1.5bn) economic stimulus package over the next three months to support the economy.
Another positive element is the rescheduling of the Dubai Expo to 2021. We had entered the year with an optimistic outlook, and the onset of coronavirus has merely slowed down that momentum, it has not brought things to a halt.
The postponement of the Expo will, in fact, act like a catalyst and bring new prospects for the real estate sector, providing an opportunity to complete planned projects.
Even though the immediate reaction from most real estate players was to be smart about the situation and protect the safety and health of their employees, residents, tenants, and other end users of space, it is imperative to note that the future of the sector will also depend greatly on how we navigate the next few months.
It is time to think about how the real estate landscape may be permanently changed in the future and alter our strategies accordingly. Those companies that will succeed in strengthening their position through this crisis will go beyond just adapting, it will come down to taking bold actions that will have far reaching influences across the value chain.
The focus on digitisation
In the UAE, going smart and paperless has always been a keen focus of the government, and now is the time when we will reap the benefits of a strong AI mandate and ICT infrastructure.
Even before the pandemic, the real estate industry had been moving toward digitising the processes and creating digitally enabled services for tenants and users.
With the closing of borders, physical distancing and the lockdown has thrown a sharper focus on the importance of digitisation, particularly when it comes to tenant and customer experience.
Residential real estate developers will need to make greater investments in digital sales and leasing processes and look at conducting virtual open houses and showings that employ augmented reality.
At Sobha Realty for example, we have instituted virtual reality tours of our Sobha Hartland community and residences to help buyer’s gain a better experience and visualise the developments while at home.
Additionally, our brochures have been digitised and simplified to help buyers easily browse through them online, while a video walkthrough of our destination is also available on the website all in an effort to accommodate the current circumstances.It is inevitable that the real estate sector, like many others, will reinvent itself. But what will determine our fate is how quickly and smartly we act.