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Dubai’s developers are starting to hit the ‘sweet spot’ in pricing - anywhere between Dh600-Dh900 a square foot — for off-plan launches aimed at a budget conscious buyer. The price band is deemed crucial to convince more genuine end-users to get in at a time when market sentiments are deemed as being soft.
Also, at these prices for what are small to mid-sized apartments, it will not be too high a barrier for buyers to finance the purchase — or at least the bulk of it — through cash rather than go through elaborate process of raising mortgages. As it is, on off-plan property, mortgage is limited to a maximum of 50 per cent of the value, as per banking guidelines.
“More properties are now being introduced in the budget-critical range of Dh500,000 to Dh1.5 million,” said Niraj Masand, Partner at the property services firm Banke M. E. “Nshama launched around 150 apartments last week at Dh500,000 to Dh1 million at the Town Square development and will follow up with another release, expected to around the same number of units and pricing in the coming days. At a price of Dh800-Dh900, these are eliciting strong responses.” (The developer had earlier launched town houses where the offer price was set from Dh1 million, but the majority were averaging around Dh1.2 million and more.) Another developer, GGICO Properties released more than 200 apartment units on April 1 (as pre-launch) and April 11 as part of its Topaz Residences project in Dubai Silicon Oasis. Price of a one-bedroom unit is Dh536,982. “Confirmed sales have gone past the 80 per cent mark for this phase,” said a spokesperson at GGICO, which also has in place a scheme with 30/70 per cent payment plan, with the balance to be paid at 2 per cent a month from completion, free of interest.
Market sources suggest that most of such purchases could be by end-users. “There’s very little flipping activity taking place in the market now and it’s quite unlikely anyone would want to buy now with that intent in mind,” said a source. “Even at these entry prices, it just wouldn’t make sense.”
Meanwhile, even at the other end of the Dubai property spectrum, developers are getting proactive on their incentives. Damac Properties has announced a pre-summer package that includes ‘promotional offers’ on payment plans and the removal of processing fees on mortgages. But the developer is not solely looking at buyers from within.
These “make investing in Dubai property even more attractive to overseas buyers and we aim to continue presenting the most luxurious living experiences with funding options,” said Niall McLoughlin, Senior Vice-President, Damac. The developer is offering mortgages free of processing fees through a partnership with Abu Dhabi Commercial Bank on all villas and apartments at Akoya.
For some of Dubai Properties’ developments, the incentives now include a 10 per cent down payment and as much as 70 per cent on handover.
Source: Manoj Nair, Associate Editor, gulfnews.com