COVID-19 made for depressed real estate markets and created growth opportunities in Saudi Arabia and the United Arab Emirates.
A Saudi company is starting an AirBnB like business to lure tourists but also staycationers weary of traveling, while new homeowners are buying cheaper off-plan properties.
In the UAE, renters are going to cheaper and spacy remote places because they can work from home, and consultants there say it’s the ultimate time to buy as prices are dirt cheap.
Mabaat’s platform lists units of various sizes and price points in distinct residential locations, enticing short-term travelers, and maintaining stable occupancy rates across the properties in its portfolio. It provides full transparency to property owners on its site by informing them of check-in and check-out confirmation, cleaning, sterilization, and general property maintenance.
Mabaat creates value for visitors to Saudi cities, including pilgrimage and Umrah visitors from different countries of the world.
Mabaat boasts occupancy rates in excess of 85% in Jeddah and receives a steady flow of bookings through its platform as well as through international platforms such as Booking.com and Airbnb.
The growth of Mabaat coincides with a period of record interest in domestic tourism in Saudi Arabia, with $14.3 billion spent in 2019, up by more than 10% over the previous year.
Meanwhile, Saudi-based Maximiliano Development Management Services (MDMS) said off-plan developments are currently experiencing some of the highest sales levels in the kingdom, notably in residential projects.
Off-plan sales are beneficial for both potential homeowners and property investors. In addition to guaranteed profit, buying off-plan properties are more affordable and flexible than an existing property.
“The owner or investor can negotiate excellent discounts, pay a small deposit with staged payments or purchase the property below the market value,” explained Mohammad Afifi, the Business Development Director of MDMS.
“One can expect high returns and capital growth because the owner can resell the property at a high market price even before the property is built or whilst under construction,” he stated.
MDMS had been working closely with the National Housing Company to develop housing projects for Saudi citizens.
The majority of the development projects have shifted to off-plan sales as a result of the coronavirus pandemic which has greatly affected the real estate market, stated Afifi.
UAE a place to invest
The real estate segment makes up nearly 40% of economic growth in Dubai.
Property consultants and analysts are currently recommending that now is a great time to buy as valuations are attractive and the cost of real estate-related funds are at the lowest.
A total of 5,246 Indians have invested in the property market in the emirate as per the Dubai Land Department (DLD) records, followed by 5,172 Emiratis.
As many as 2,198 Saudi investors have chosen assets in Dubai.
Indians also topped in investment value, injecting more than $2.97 billion last year into the emirate’s property sector, followed by $2.2 bn by Emiratis, and $1.34 bn from Saudi.
An intriguing survey by ServiceMarket, a leading digital platform in the UAE for home services, revealed moving trends in Dubai over the past few months.
The top 10 areas in Dubai where residents moved to in Q3 2020 comprise more than half of the total move-in requests and in what is known as, “New Dubai”.
Dubailand and its suburbs, comprising multiple projects such as Town Square, Mira Community, Akoya Damac, Remraam, and Arjan, came top of the list with approximately 12.1% of all moves.
Highly dense urban centers like Dubai Marina and Downtown Dubai continue to top the lists.
In comparison to last year, the number of move-in requests received for Dubailand has increased by 30%.
One of the driving forces behind this trend is the rising popularity of Town Square, which has seen thousands of residential units being handed over in late 2019.
Mira Community, which is the second most popular project in Dubai’s suburbs has managed to retain its position among the top 3 most popular suburban areas.
Akoya Oxygen by Damac also appears to be a high contender in terms of growth as ServiceMarket has seen a significant increase in the move-in requests in one quarter alone as opposed to the whole of 2019.
It is important to note that the Academic City, Silicon Oasis, and International City have also seen an increase. This change is mainly due to people moving to Dubai Silicon Oasis and International City.
These communities on the outskirts of Dubai mainly target the expat community, especially families with kids, promoting an improved standard of living with enough space for the kids to play and enjoy the outdoors.
The arrival of the COVID-19 pandemic in 2020 could have caused the acceleration in moving requests to the outskirts of Dubai, coupled with the following potential factors:
- Rental rates of 3-bedroom villas in Akoya Oxygen are around 66,000 Dirhams while similar-sized units in areas closer to the city’s center, like Jumeirah are around 157,000 Dirhams.
- The rental costs in the suburbs are not only lower but also offer more space. Many of the suburbs offer townhouses and villas with spacious gardens and more rooms.
- With many people still working from home, the commute factor could be less of an issue as people don’t have to travel to work or school on a daily basis.