The coronavirus and Dubai real estate - The implications

A practical look at the coronavirus and what we are doing to help our clients.

15 Mar 2020, words by Aneesha Rai in The Market

Doctor | Impact of coronavirus in Dubai real estate

With the total recorded coronavirus cases in the UAE reaching 113 according to Al Arabiya on 18th March 2020, the UAE authorities are being vigilant and doing their best to make sure that public health is in their best interest. Out of these cases, there are 87 active cases in the country, with 26 total recoveries and no deaths reported.

The Ministry of Health and Prevention in the UAE (MoHAP) has declared that the cases are being monitored, and individuals are currently in a stable condition and are receiving all the necessary healthcare required, all in accordance with WHO regulations.

On Thursday (12th March 2020), the World Health Organisation (WHO) has declared COVID 19 as a pandemic. According to the statement given by the WHO Director-General, the organization has done its best to advise the countries on what to do in order to curb the virus, as well as applauded the efforts on curtailing the spread from highly-affected countries such as China, Iran, Italy and South Korea. The virus is expected to take a toll on societies, sectors, and economies in the short-term, but said that the countries are instrumental in the four-fold process of prevention, preparedness, public health and political leadership.

The current state of the coronavirus worldwide is that it seems to be rapidly spreading, but the recovery rate is also encouraging, with a clear slowdown being recorded in China due to stringent governmental measures. Those with compromised immune systems as well as the older population are known to be the most affected. Out of all the historical cases recorded according to WHO & CDC, the current recovery rate stands at 47%, with a 3.72% mortality rate. That being said, the focus is on curbing the spread of the virus.

There are several claims that the increase in temperature could kill off the virus, however according to the Economic Times and CDC, it may not be so. The main way the virus spreads is through human contact.  

What is the impact on coronavirus in Dubai so far?

1. Updates on public safety & health

1) Schools & colleges: These past two weeks have seen a preponement of a two week spring break for school and nursery-going children, along with an extended two week e-learning initiative. Local universities have followed suit. (Arab News)

2) Travel: Authorities have been stringent at airports, introducing swab-testing for passengers from high-risk countries and thermal scanning. Visit visas to the UAE are suspended from March 17. Flights to Lebanon, Iraq, Syria, Spain, Italy and Turkey have been suspended till further notice. Flydubai has stopped all flights to and fro India, in addition to several other countries. The UAE has also stopped issuing tourist visas since March 17th, save for a select few nationalities that have visa on arrival as well as diplomats.

3) Events & venues closed: All events, conferences, shisha cafes, theme parks, gyms, amusement centres, cinemas, beaches, parks, tourist sites, and night clubs have also been closed as a mandate for two weeks, along with the postponement of several events towards the end of the year (The National).  This also includes events at home. Some hotels have also stopped receiving bookings, this includes The Address Fountain Views, Vida Hills, and Vida Dubai Creek Harbour. All Majid Al Futtaim malls have reduced timings between 12pm and 8pm.

2. Updates on the real estate market

Like all other businesses, the real estate market is also showing signs of a slowdown. All businesses, both large and small have been affected. 

If you have purchased a property on a mortgage and are struggling to pay it and have other loans to pay, you may appeal to reschedule your loans. UAE's central bank has advised banks to reschedule loans and reduce fees and commissions, as part of measures to mitigate the economic effects of the coronavirus outbreak (New York Times). The banks have received an additional stimulus and are now allowed to free-up their regulatory capital buffers to boost lending capacity and support the UAE economy at zero cost against collateral. 

If you are considering purchasing your first property, please note that this may be the right time to do so. An increased loan-to-value ratio for first-time home buyers indicates that you can now pay a downpayment of 20% as opposed to the previous 25% on completed projects up to AED 5 million. To have a look at our portfolio of ready properties up to AED 5 million, please click here. The Central Bank of the UAE will also revise the existing limit that sets the maximum exposure that banks can have to the real estate sector. When the exposure reaches 20% of the bank's loan portfolio, that bank will be allowed to increase it to 30%, but will be required to hold more capital. You can view all the measures set out by the Central Bank of the UAE here.

For sellers and investors, having a professional real estate broker to advise you on what to do in regards to your property has never been more important. Please contact us on +9714 4327972 to know your concerns. We will also regularly keep in touch with you for updates and are operating as normal, but will take the necessary precautions surrounding protecting ourselves and you. More detailed guidelines on our policy is listed further below. 

3. Financial markets

Financial markets

The coronavirus has also had a strong impact on financial markets. With oil under pressure since the beginning of the year, there is an ongoing price war with crude oil suppliers, thereby affecting markets worldwide (Gulf News). Besides this, the virus' impact has impacted several industries - most notably banking, tourism & hospitality which contribute a large chunk to the UAE's GDP. That being said, the UAE Central has offered an AED 100 billion stimulus to the economy, 50% of which will be given to banks at zero interest rates as collateralised loans. The other Dh50 billion will be tapped through the capital buffers operated by banks operating in the country.

4. Local governance

The Dubai government has also unveiled an AED 1.5 billion economic stimulus package to ease the cost of living expenses (Khaleej Times). This includes a reduction in water and electricity bills (DEWA) by 10% for those in the residential, commercial and industrial sector for the next 3 months and a reduced DEWA deposit by 50%.

Other additonal economic stimuli also include improving the commercial and banking sectors, tourism sector, external trade, and local commerce.

What you can do

1. Know the symptoms

According to the CDC, the following symptoms may appear 2-14 days after exposure:

1. Fever 

2. Cough 

3. Shortness of breath

Emergency warning signs that require immediate attention include: difficulty breathing or shortness of breath, persistent pain or pressure in the chest and bluish lips or face.

If you face any of these symptoms, please head to your nearest medical provider. There will be both a blood test and swab test that will take around 2 days for results. Meanwhile, please put yourself in quarantine and urge family members to wear a mask while caring for you and to quarantine themselves as well.

2. Preventative measures

Here are some measures by WHO & CDC that you can take:

1. Other than practicing daily hygiene practices like regular washing of hands, please also practice social distancing and avoid all person to person contact. 

2. If you are sick, please stay at home. Many offices also offer a working from home policy, so do ask your employer for that as an option if you have a compromised immune system.

3. Pregnant women, senior members of the family and children are advised to minimise exposure as much as possible.

4.Stay active and eat healthy in order to boost your immunity. By no means should you be panicking and hoarding house supplies as this severely affects those who truly need it and for the sake of everyone in your community. 

5. Refrain from non-essential travel, if you really must do so, you must self-quarantine for a minimum of 14 days. 

6. If you are taking care of someone who is sick, please use a mask and quarantine yourself as well.

7. Clean and disinfect frequently touched surfaces daily. This includes tables, doorknobs, light switches, countertops, handles, desks, phones, keyboards, toilets, faucets, and sinks.

8. If you use a tissue, throw it away immediately.

3. Support your local business

As this is a trying time to most small businesses (including ours), please do consider giving them business in order to help prop up the economy as SMEs are usually hurt first during trying economic times. 

LUXHABITAT's policy on Coronavirus (COVID-19)

In light of recent developments around Covid-19, we at LUXHABITAT wanted to keep you informed of the steps we are taking to protect both our community and our team. 

For the time being, we will continue to offer appraisals & viewings and operate our business as usual, unless mandated differently as per UAE government policies or in the event that the current situation further deteriorates. We are keeping a close eye on the guidelines surrounding travel, social distancing, and health as per UAE government rules and regulations. Under the changing circumstances, we are happy to provide you with alternative digital solutions if face-to-face appointments are no longer possible as well as a preventative measure.

Our team will be operating with a no-touch policy (that means no handshakes or hugs) and will be following advice around handwashing and hygiene in accordance with international and local health guidelines. We will also be providing guidance to homeowners on how to prepare their homes for viewings, and to notify us if they experience any symptoms so we can ensure none of our community or staff is put at risk.

Although we have recently seen a decrease in the level of activity around website traffic and viewings, we are still actively closing transactions and we remain hopeful and positive about further developments not only in the UAE but worldwide. We acknowledge, understand & empathise with the challenging situation at present and aim to do our best to provide assistance to our current and future clients. 

Our team is available round the clock to discuss any concerns you may have around the market, so do feel free to get in touch with us at any point in time on +9714 432 79 72 or email [email protected]

Wishing you and your loved ones the very best of health.

TEAM LUXHABITAT

Editor's note: The statistics posted are true as of 18th March 2020 and are subject to change. We are constantly reviewing our policies as we