Head of Sales and Marketing
As all of mankind has been affected, one way or the other, by this terrible pandemic, we also can’t help but realize that this is probably the only devastation in our lifetime (God willing) that we will face together at once. Just imagine the ripple effect this phenomenon is and will continue to have across multiple sectors on a global scale. One such effect is the rate of global population growth which is expected to reach 20 percent between 19 to 20 months after the pandemic is over, according to HSBC Global Economist, James Pomeroy. This ‘bounce-back’ surge in birth rates is historically linked to high mortality events and is usually defined as a compensatory rise in population.
Another factor that we are witnessing right now is the impact migration has on city populations. As jobs that were once considered stable and promising within sectors such as hospitality and retail are majorly impacted by the pandemic, we are seeing more and more people catching a one-way flight back home.
Fast forward to post-pandemic times, which is expected to be by Q4 of 2021, and all the ‘corrections’ or ‘bounce-backs’ will start to take effect. Populations in most cities will begin to witness growth levels that are U-shaped; bringing back what was displaced during the pandemic. New jobs will be made available at those sectors that were most hit. Migration will be on the rise again due mostly to those opportunities. This is when we will begin noticing the impact all these changes are having on the real estate market. According to the recent Reuters poll in May, analysts forecast Dubai house prices would rise 1.1 percent this year and 2.8 percent next, marking a complete U-turn in expectations from a January survey when prices were forecast to decline 2 percent in both years.
Since we have now identified the reasons behind the real estate market boom, we can now shed light on investment opportunities that you can consider now and take advantage of before the economies of the world, along with the global population, ‘bounce-back’. With reduced rates of lending and since it’s obviously a buyer’s market, anyone with a right mind would tell you that this is the best time to buy. And as a matter of fact, it just is. Prices are better. Offers are available. And the whole ‘supply is greater than demand’ scenario is resulting in creative ways for developers to offload property just to maintain a steady cash flow and a healthy operation. According to Sotheby’s International Realty Canada, Canada’s metropolitan luxury real estate markets are undergoing an unprecedented phase of evolution and expansion. This is mainly due to changes in housing preferences affected by the pandemic. People all over the world are being impacted by significant cash accumulation, easy access to borrowing, and pent-up local and international demand, which are rippling across the market. We also can’t avoid the notion that since we have been stuck in our homes longer due to the lockdowns, our home-improvement plans and lifestyle quality standards have gone up. This is predominantly why it is highly recommended to consider investing in luxury residences now and reap the rewards as soon as mid 2022.
We all wish for the pandemic to be over; and it will be soon. It is therefore crucial to consider what is your take on how things will roll out and why. All you need to do is to go back to our history as early as the last pandemic, compare signs and statistics, and accordingly make calculated investment decisions on how to take advantage of opportunities at such times as these.
This article was published as part of the sixth edition of Property Finder Bahrain’s Trends Report.