The COVID-19 pandemic has resulted in global uncertainty. As a result many people’s employment situations have changed, leaving them faced with financial worries for the future. The United Arab Emirates have recently issued directives which will put some of those concerns at ease. Residents in Abu Dhabi and Dubai who are finding it difficult to pay their rent are now protected from eviction thanks to these new directives.
All eviction judgements have been temporarily suspended by His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Leader of Dubai and Chairman of the Dubai Judicial Council. This directive includes both residential and commercial facilities in Dubai to the end of April.
"The generous gesture reflects the leadership’s humanitarian considerations at a time when people are facing challenges,” (Dubai Media Office)
Abu Dhabi residents will face a similar leeway due to the directive placed by His Highness Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces on Tuesday. The ruling states that all rental property eviction cases will be halted immediately and for the foreseeable future.
It is true that landlords have a list of rights which protect them in the case that a tenant is unsuccessful in paying their rent. Despite this the Real Estate Regulatory Agency (RERA) confirmed that their current priorities lie within “the well-being and safeguarding of tenants” (Source The National)
“This is an exceptional situation that we are witnessing … We are confident of the moral standards of landlords in Dubai who are working closely with the authorities under the guidance of the wise leadership to make sure residents feel safe in their homes and that their mental and physical well-being are being prioritised,” (Source Dubai Land Department)
Certain developers such as Nakheel and Aldar in Abu Dhabi are working with the relevant financial institutions to offer lenient terms to current tenants. These include waived administrative fees, delayed payment options and discounts on cooling charges. As discussions continue to be made more options helping tenants are likely to emerge.
Despite continued efforts from The Central Bank of the United Arab Emirates, the Dubai Land Department and independent developers, some expect that the real estate industry will still suffer due to COVID-19. S&P Global Ratings predict the Dubai property prices to fall below levels that have only been witnessed 10 years prior.
“We believe real estate prices are approaching levels seen at the bottom of the last cycle in 2010 and are even lower on an inflation-adjusted basis and considering sales incentives for off-plan property,” (Credit S&P global ratings). The ratings of major developers have also shifted negatively in correlation with the start of the pandemic according to S&P.
Like any industry, real estate will inevitably be negatively effected by the pandemic, at least in the short run. The resilience and foundation of the market will be severely tested throughout this period.
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