BUSINESS

The potential long-term impact of COVID-19 on the GCC housing landscape

DUBAI — Stay-at-home measures and enforced lockdowns, as a response to COVID-19, have begun to shape end-user behaviour and preferences when it comes to their homes. The world’s largest Work-from-Home (WFH) experiment has encouraged homeowners and occupiers to reimagine their dream home, with a greater focus on health, comfort and privacy within a post-COVID life > To highlight this trend, on June 2020, CBRE Global Research has conducted a survey titled ‘The Future of the office: 2020 Global occupier sentiment survey’ of 126 senior-level global real estate executives from Fortune 500 and 100 firms, to determine how the COVID-19 pandemic will change the use of office space. It resulted that 70% of respondents indicated that some portion of their workforce will be allowed to work remotely full-time and 61% indicated that all employees would be allowed to work outside the office at least part-time. The WFH trend is here to stay, if not for all industries and sectors then for majority and this will translate into re-imagining the way homes are built and utilized. To understand this trend from an occupier or rather a WFH employee perspective, ‘Hana’ has conducted a recent survey with +1,000 employees who experienced WFH to understand the benefits of remote working. Majority of employees prefer to work from home for several reasons including saving money, ability to dress freely, no commuting needed, better work-life balance, and it provides more control over work schedule. Hana is wholly-owned subsidiary of CBRE that offers flexible workspace solutions, operating in both UK and the US. End-users may migrate from apartments to villas in line with their affordability The GCC is expected to see a growing preference for larger, stand-alone housing units. End-users may migrate from apartments to villas in line with their affordability, seeking private amenities including swimming pool, garden or BBQ area. Gabriella De La Torre, a director in CBRE’s consulting division, commented, “Residents living in smaller apartments are now looking to move to a larger stand-alone villa or townhouse to have more space, as well as enhanced amenities. This trend is also driven by greater levels of affordable pricing across the GCC market, encouraging end-users to upsize where possible.” End-users may now consider moving from apartments to villas, in line with their affordability, seeking amenities such as: • Private swimming pool • Private garden / courtyard • Office or study space • Larger living area • Outdoor seating • Private outdoor BBQ area CBRE have also seen instances, for example, of working couples based in the GCC choosing to leave their 1-bedroom units to larger, 2-bedroom units to be able to convert the second bedroom to a dedicated office space. Change in home layouts to support more flexible life > CBRE expects that end-users will look for housing that offers extra space to set up a home office, home gym or play area for children. Incorporating flexibility in a physical way is expected to become more and more important. Architects around the world are identifying cost-effective ways of doing just that. One way to accommodate the multiple responsibilities of today’s life >Increasing demand for smart homes as households spent more time at home The continuous increase in the number of internet and smartphone users across the GCC is expected to boost the popularity of Internet of Things (IoT) amongst households via the adoption of smart home products including but not limited to smart thermostat and smart lighting control. CBRE expects the increase in demand for smart applications within the home to be driven by: • Need to reduce household utility bills via the adoption of smart / energy-efficient technologies • WFH trend driving demand for user-friendly, technology-equipped spaces to support work activities • Growing prevalence of smart surveillance systems, video doorbells and voice assistants (i.e. Alexa) • Popularity of on-demand streaming services (i.e. Netflix) supporting demand for smart entertainment systems COVID-19 may accelerate the growth of green housing developments With most households spending increasing amounts of time at home, end-users are witnessing higher utility bills. As agile working becomes more prominent beyond COVID, it is expected that end-users will become more conscious about their homes’ energy efficiency. To support this trend, Dubai has launched various initiatives and regulations to further promote green energy: • Developments must comply with minimum energy requirements outlined in the ‘Green Building Regulations & Specifications.’ • Under the Dubai Clean Energy Strategy, Dubai is committed to generate 75% of Emirate’s energy from clean sources by 2050. • DEWA has started transforming energy users to energy producers under ‘Shams Dubai Initiative,’ which encourages real estate owners to install solar photovoltaic panels. As of late 2019, more than 1,300 buildings benefit from solar power. COVID-19 is expected to further accelerate the shift towards green energy, with end-users increasingly motivated to reduce utility costs as they spend more time at home. In addition to demand from end-users, government initiatives are expected to encourage GCC real estate developers to think green at a faster pace. — SG