Property market finds itself in a good space
A rise in first-time buyers shows the sector’s resilience
Forget for a moment all the talk about market slowdowns and weak sentiments and focus on just two numbers. In the year through August, Dubai pulled in 9,500 investors who were acquiring a property in the city for the first time.
Now, if these buyers hold on to their investments right through the payment period, they would have put a combined Dh19 billion into the market, according to figures from Dubai Land Department.
So in a tight market nearly 10,000 first-timers saw enough in Dubai to make a key investment decision.
For Dubai’s developers, the challenge now and into next year is to find ways to attract more such buyers. The tens of thousands of new homes being built and delivered will need these first-timers as much as they do investors. More flexible residency visa programmes can also help.
From today to Thursday, they will have the Cityscape Global platform to pitch their offers.
Already, there have been moves by developers ahead of the actual opening — Union Properties announced a Dh2.5 billion ‘Avenue District’ carved out of its Motor City master development. A mix of residential and retail will take up much of the built space, and includes a 100,000 square foot BMW and Mini showroom.
Down payments
And there’re other numbers property buyers in Dubai will come across — the 5 per cent and 10 per cent down payments. The developer Seven Tides has a 5 per cent scheme for its Dh1.3 billion Se7en City project at JLT.
This will be “followed by payments equal to 6 per cent of the cost price, to be paid every subsequent quarter, with a completion date of third quarter 202[third quarter of 2021], said Abdullah Bin Sulayem, CEO. “We estimate that the studios should yield 12 per cent per annum.”
Studios start from Dh393,000 and one-bedroom apartments from Dh760,000. For those investors thinking beyond apartments and villas, there are always the plots to go after.
“Investors are attracted by plots now available for Dh325 per square foot compared with Dh700-Dh800 per square foot in 2007-08,” said Firas Al Msaddi, CEO of fam Properties.
“That means huge savings in outlay, and a properly planned development strategy can maximise the return on investment.”
JLL suggests that “the importance of promoting innovation and attracting more start-up businesses has now been recognised and is a key part of the government’s strategy for the next stage of Dubai’s development.”