THE IMPACTS OF COVID-19 ON THE REAL ESTATE MARKET IN DUBAI

Abstract

In 2020, as a result of the coronavirus pandemic, the entire world went into ‘lockdown’. During this phase, the global economy shut down because no one was allowed to leave their home and correspondingly no economic or commercial activity (which required physical interaction) could take place.

This led to great global economic breakdowns. Both small and medium sized enterprises and multinational corporations alike lost significant sources of revenue, and some firms even went bankrupt. Consumers lost employment and sources of income for their households. Countries went into large budget deficits attempting to correct the stagflation through expansionary demand side fiscal and monetary policies. As can be seen, the COVID-19 pandemic only brought negative implications for the entire world.

Dubai went through the consequences of this economic crash, not unlike the rest of the world. However, Dubai was not greatly negatively affected by the pandemic relative to other economies throughout the world; as the unemployment rate and economic growth were controlled effectively through government policies.

Zooming into the real estate industry, it is one that involves a lot of human interaction at all stages of the commercial activity, whether that be conducting viewings to encourage clients to purchase the property; or signing sale and purchase agreements for transaction of properties. The initial phases of the coronavirus pandemic resulted in a full shut down of the industry and when the lockdown was lifted, the real estate industry in Dubai underwent a myriad of intriguing implications.

There were a large number of factors that influenced the changes in the property market following the events of 2020 during the COVID-19 pandemic, and these are the factors that will be thoroughly explored and analysed in this research paper. Such factors include the change in population as a result of the imbalance between immigration and emigration in the city, the rising unemployment figures, the wealth of residents of Dubai, and even the behavioural aspects of consumers’ preferences towards certain types of property rather than others.

This research paper is going to investigate how the COVID-19 pandemic has impacted the real estate market in Dubai.