As we speak, the pandemic has spread across 199 countries, causing 32,000 deaths globally. It prompted governments all over the world, including the UAE to curb economic activities and implement movement restrictions.
It is now evident that crises like these would have a ripple effect in the economy across all sectors as we witness the crash of the global stock market. The slump in oil prices due to the ongoing price war between Saudi Arabia, USA, and Russia is acting as a catalyst for the recession. These global events are spooking investors’ confidence and discouraging them from investing their money. There is no denying that there will be short term dip in the economic cycle across all sectors; in the long run, however, this can be a blessing in disguise for investors. We at Fincasa, believe that investment in the UAE real estate sector can be a safe bet in the long run. Here’s why.
Seven reasons to invest in real estate
1. Crises of this magnitude bring stimuli packages from the government. Recently, the UAE government announced AED 126.5 Billion economic stimulus package aimed at mitigating the short-term impact of the virus. The package mainly focuses on reducing the cost of doing business and simplifying the business procedure.
2. The Coronavirus has prompted the government to push the interest rate even lower by 75 basis points which means lower financing cost and a greater opportunity to invest in the sector.
3. The healthcare real estate sector is expected to boom in the aftermath of the crisis. The UAE has a robust healthcare system equipped with resources and technology to keep its populace safe; this would attract foreign investors to invest in healthcare. According to the JLL report (Healthy returns) 2019, the next five years will carry ample opportunities to invest in the healthcare market across the MENA region owing to the ageing population and increased demand for healthcare facilities.
4. With major events like the “Expo 2020” and the “Dubai International Boat Show” bringing a massive influx of tourists despite their delay, a boost for the real estate sector is expected.
5. The most badly affected sectors by this outbreak are tourism, retail, and hospitality which will resume traction in the long-term. The near-term impact can be recovered in one or two-quarters of the economic cycle.
6. The current outbreak would affect the shopping habits of UAE residents, making online shopping more prevalent. This would increase the requirement of industrial space for managing inventory which would boost the real estate sector.
7. In the past few years, the government came up with policy changes to boost the real estate sector in the UAE. In Dubai, the government announced Visa reforms in late 2018 which would encourage ex-pats to invest their savings in the country. The government also launched the “Golden Card” Program in 2019 aimed at providing long-term residency permits to intellectuals and executive directors earning more than 30,000 AED per month
Conclusion
If history is any indication, the global economy has recovered from economic crises in the past and will recover once again. In the short-term, every sector will face the skewed supply-demand problem, but eventually, businesses will come back stronger. UAE promises a conducive business environment backed by a stable government. The onus is now on investors to grab this opportunity by setting their business in the UAE.
Who we are
Fincasa Capital is a global financial advisory firm designed to give the maximum return of investors investment. It has a team of professional experts providing suitable strategies for investors to maximize their returns. If you are interested to invest in UAE Real estate, let us help you. It would be a wise step to consult someone having proper know-how of the UAE market.
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