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Dubai: Even Gulf investors are taking an interest in the affordable property options Dubai has to offer, which represents quite a shift given that their historical preference has always been for premium buys. If the change becomes even more pronounced from current levels, it could have an impact on luxury off-plan launches in the medium term.
As such, “value-for-money has become more important than property prestige, especially as buyers from Russia and CIS countries were considerably fewer than last year”, states an Asteco report tracking first quarter’s trends in Dubai’s realty market. “This is prompting new opportunities, and we are seeing more GCC investor interest in reasonably priced properties, led by Saudi Arabia and the UAE, including off-plan projects specifically designed for investors,” Asteco said in the report.
This week, Mohammad Al Jbori, CEO of Binghatti Developers, confirmed that his company’s portfolio included two projects built for institutional buyers and a new one with which he is targeting individual buyers. Such mix-and-match approaches could be more in evidence as developers look to optimise their land holdings and not be reliant overtly to any one sales approach.
Dubai’s developers, especially those with projects at a slightly higher price point, are also responding fast to the fluid circumstances. “Interestingly, we also finally saw a degree of willingness on the part of premium property vendors to reduce their asking rates — but with limited demand in this segment, transaction activity has been relatively low,” stated John Stevens, Managing Director at Asteco.
Instead, projects aimed at a mid-market audience have been coming through thick and fast — these include the 1,000 three- and four-bedroom town houses at the Town Square community being built by Nshama. There are three-bed unit which carried a launch price tag of Dh1 million.
Other launches in the first three months include the Acacia Heights (479 apartments) at Mohammad bin Rashid City and Reef Residences (378 apartments) in Jumeirah Village Circle. “This highlights the continuous expansion of the city further inland as developers target the more affordable segments of the market,” Stevens said.
Following on from second half of 2014 trends, overall apartment and villas sales prices continued to fall in the first quarter of this year, registering a respective 3 per cent and 2 per cent decline.
The pace of relocations that had taken place across Dubai in 2013-14 seems to have subsidised, according to Asteco. “Most tenants chose to renew their rental contracts rather than relocate,” its report notes. “High-end apartments in Dubai Marina and Downtown Dubai remained popular. Secondary locations such as Dubai Sports City, in addition, attracted good levels of demand from middle-income residents due to the master community becoming better established.”
Source: Staff Report, gulfnews.com