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Dubai’s developers will do well to follow the Canal works — that’s where they are likely to find their next buyers.
The residential component of Al Habtoor City development has already seen a demand uplift due to its proximity to the canal, as foreign investors come on board to acquire property for the “first time”, according to the latest Dubai realty update from JLL, the consultancy. Al Habtoor City has three high-rises offering a combined tally of 1,500 apartments.
Damac Properties too has cast a line in the canal’s waters through Aykon City, a cluster of premium high-rises. Average prices are in the region of Dh1,500 a square foot along the canal route.
Other developers should also be following on the same path, and syncing the launches as the canal extension reaches key project milestones, according to the realty update.
The Canal development is overseen by a joint venture of Meydaan and Meraas Holding.
Meanwhile, JLL reckons that the rate of decline seen in sales is showing further signs of stabilising.
“Various factors are bringing the market towards the bottom of its cycle,” said Craig Plumb, Head of Research at JLL Mena.
“On one hand, the strong dollar is impacting the dollar-pegged GCC currencies, which is making Dubai real estate more expensive for buyers from non-dollar pegged markets.
“On the other hand, the continued period of low oil prices is tightening regional liquidity, which is also affecting the real estate market.”
JLL estimates that 2,200 new homes were added to the stock during the first quarter of this year.
At the more accessible end of the pricing spectrum, developers continue to be active with select launches. Recently, Dubai Properties’ new Serena project in Dubailand was launched, comprising 8.2 million square feet.
JLL defines “affordable projects” in Dubai as those offering two-bedroom units for sale at Dh790,000 and with rents of Dh73,000.
“This is considered ‘affordable’ by a middle-income family seeking to allocate 30 per cent of their total income to housing,” JLL adds.
“While there are more projects being launched in this sector, it remains undersupplied relative to the upper end of the market.”
Source: Manoj Nair, Associate Editor, gulfnews.com