The coronavirus pandemic has driven a shift in attitudes amongst Middle East home buyers, according to the 2021 Knight Frank Global Buyer Survey. The survey represents the views of over 900 Knight Frank clients across 49 key global markets.
People around the world have had a chance to reassess their home-work-life balance as a result of the pandemic and the need to work remotely has driven some fascinating changes in home buyers’ attitudes around the Middle East.
Faisal Durrani, Partner – Head of Middle East Research at Knight Frank explained, “Unlike mature cities across the world, which often have very defined cores and sprawling suburbs, cities in the Gulf are still in expansion mode, which means there are multiple focus communities, where the majority of people live. Despite this, the pandemic has fuelled aspirations for bigger homes, much like the respondents from elsewhere in the world”.
68% of Knight Frank’s survey respondents around the world live in cities, compared to 95% in the Middle East. 57% of respondents in the region said they would be most likely to buy a villa, or a home in a more rural location for their next purchase, slightly higher than the rest of the world’s respondents (51%).
Durrani added, “This is a fascinating insight into what home buyers are thinking for their next property chessboard move. In markets like Dubai, we’re already seeing villa demand driving faster price growth for villas than apartments. Indeed, villa values in Dubai have climbed by 7.8% since Q1 2020, compared to a -5.9% fall for apartments. So, despite this financial reality, buyers are still eyeing up bigger and more expensive homes for their next home”.
Holiday homes in high demand
Interestingly, when asked about their motivations for their next purchase, Knight Frank’s survey reveals that just 23% of Middle East respondents say it would be driven by the need to upgrade their primary residence, compared to 35% of global respondents. One of the stand-out differences was the apparent need for Middle East homeowners to secure a holiday home sanctuary (14%). Globally this figure was lower at just 6%.
Some 33% of global buyers say they are more likely to purchase a second home as a result of Covid-19, up from 26% last year. Of those looking to buy a second home, 23% say the pandemic has influenced where they want to buy and 22% say it has delayed their purchase plans.
ESG to shape success of future real estate projects
Sustainability was also high up on the agenda for the region’s home buyers and certain ESG factors appear to be more important to home buyers in the Middle East than elsewhere in the world.
Durrani said: “Green is definitely the new black, and in the Middle East, buyers are increasingly focused on all things ESG. Half of the respondents cited the energy efficiency of their next home being a ‘very important’ issue, compared to 42% of global buyers. Furthermore, the green agenda appears to not just be a superficial flavour of the month”.
Of the eight different location criteria Knight Frank asked buyers to rank in terms of importance for their next home, proximity to good schools and access to healthcare were unsurprisingly important; however, proximity to green space and good air quality topped the list of location features and are more important to home buyers in the Middle East than their global counterparts.
“This should send a very strong signal to developers and planners around the region about how important ‘being greener’ will be in driving the success of new projects. Furthermore, the November Climate Change Conference (COP 26) in Glasgow will help to cement 2021 as the Year of the Green Re-awakening for real estate and the green drumbeat is only going to grow louder as investors and buyers zero in on this all-important issue”, concluded Durrani.