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When Sanjeev Meeta purchased a plot in The Villa, he had his dream house in mind. He wanted to build from scratch rather than buy an existing property and modify it later. “We added a gym, made the space friendlier for older people and optimised the room sizes to meet our functional needs.” Building his own home also made sense cost-wise, Meeta says.
The 53-year-old banker-turned-consultant has no immediate plans to convert the property into an investment asset, but he’s not closing that possibility. “I am building this home for end use and do not have an investment objective in sight,” he says.
“However, in the long run, I believe that real estate investment in Dubai is an excellent investment option. Currently, property prices in Dubai offer attractive value to investors and end users.
“While it is impossible to time the market to buy low and sell high, this is probably a good time for buying property in Dubai, especially for end users like me. Moreover, buying property is a good rent substitution. I am very positive about the attractiveness of Dubai both as a place to live and as an investment destination.”
Like Meeta, many buyers are purchasing plots to build tailor-made homes in Dubai. “For these niche buyers, the current projects do not offer them individuality, as units in a single community will have a similar type of layout, facilities and finishing,” explains Pawan Batavia, Director at Synergy Properties. “Building one’s own villa gives the flexibility to choose the preferred layout, design and finishing.”
However, constructing customised homes is not always cheap, as in many communities it is cheaper to buy a ready villa than to build your own home. In some areas such as Emirates Hills, self-build gives the investor a cost advantage and a free hand to design the villa, says Batavia.
Some developers are selling plots as an additional avenue to attract buyers for their project. Although the concept of selling residential plots is not new, presently there has been a rise in the residential plot offering, as there is an overall increase in offerings from various master developers across different locations.
Rajiv Ghanekar, Associate Director at Fine and Country Real Estate Brokers, notes the growth of the mid- and high-income segment in Dubai is an impetus to plot sales. These buyers mainly have the desire and resources to build their house according to their needs. Furthermore, while buying a plot in Emirates Hills or the Palm Jumeirah would seem far-fetched for many, there are options at various price points in some of the popular communities, says Ghanekar.
“Dubai Properties spotted this trend early on and brought to the market villa plots in The Villa project in Dubailand,” he says. “This was the most affordable offering priced around Dh150-Dh200 per square foot when initially launched.”
However, residential villa plots have been offered in Dubai for over a decade, with Emaar’s Emirates Hills being the first to introduce it in the freehold segment. “Emirates Hills for the longest of time was the only project where one could purchase plots and custom-make houses,” says Ghanekar.
Presently, in most established communities, such as Emirates Hills or the Palm Jumeirah, plots are limited and are only available on the resale market. “We have seen a good number of plot sales over the last year in Dubai Hills Estate, which is an upcoming luxury development by Emaar and Meraas, poised to become the new Emirates Hills,” says Ghanekar. “It offers a spread of plots that are nearly 50 per cent below the prices of Emirates Hills and have an advantage of being in a more central location, closer to Downtown Dubai and the trading hubs of Bur Dubai and Deira.
“Another trend, which I envisage will pick up, is the sale of shell-and-core villas. Emaar again is the pioneer of such an offering with its Polo Homes mansions in Arabian Ranches. These mansions were sold in 2010-11 as empty shells, though fully structured and painted externally.” In this concept, buyers buy a ready-made house, but can bring their own fixtures and interior design work.
Where to buy
“Purchasing a shell-and-core unit does provide the buyers with a sense of involvement in home building,” says Ghanekar. “It saves time and money largely since shell-and-core houses are sold at much lower prices than finished ones and avoid the inconvenience of dismantling the fixtures and redoing it all over again, as in the case of a ready villa. Moreover, finance is readily available for such villas.”
Ghanekar says buyers must watch out for Dubai Hills Estate Mansions, which he says is a premium lifestyle development by Emaar and Meraas. “Houses here are currently being sold as shell-and-core. Buyers can choose the plots, floor plan and a variety of elevation,” says Ghanekar. “Prices start from Dh25 million, including the cost of the plot and the shell-and-core villa.”
Ghanekar says plot buyers are mainly well-established business families that have a unique need for customisation, elevation, design, tailor-made floor plans and other requirements. These buyers may also need a larger plot or want to construct vastu or feng shui compliant homes.
Source: Hina Navin, Special to Property Weekly