The pandemic has significantly impacted the real estate industry in Dubai, which was disrupted with the lockdowns, restrictions, and growing trend of working from home. Recovery in the commercial market was slightly slower compared to residential real estate, but it has also enjoyed a boom in the Q4.
What were the key trends we have noticed? When it comes to office units, we have seen a number of companies downsizing to accommodate their new working from home arrangements, as well as companies that wanted to utilise favourable conditions to upgrade to high quality office space. The retail market has struggled over the past year, with the restrictions of movement, closures, and even today with a limited number of customers they can accommodate in their premises.
However, by the end of 2020, we have seen an increase in the number of units sold, something that can be attributed to the actions taken by the Central Bank as well as a comprehensive 100 billion dirhams ($27.2 billion) economic plan helped businesses mitigate the impact of the outbreak. The liberalisation of business laws also came as welcome news to foreign investors and expat business owners. Another factor that helped nurture this favourable business climate was the resumption of diplomatic relations with Qatar and Israel. This will undoubtedly open the door to new trade and business opportunities, acting as further stimuli for businesses in the country.
The fact that the total value of commercial units has decreased will likely mean that investors looking to take advantage of the economic situation will make 2021 a good year in terms of the number of transactions. This can be seen from the fact that despite buyer leads seeing a year on year increase of 79% throughout 2020, this was not reflected in the number of transactions. This might indicate a growing interest in purchasing a commercial property, with buyers waiting for 2021 to see what happens in terms of the economic situation.
For more insight into the 2020 real estate market, then take a look at our full report.