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As organisers of the International Property Show (IPS) prepare for this year’s edition on April 11-13, many expect the exhibition floors to be filled with affordable deals. According to Dawood Al Shezawi, President of Strategic Marketing and Exhibitions, the company behind the event, investors were always looking for new investment channels, and the new trend on affordable housing has been partly due to the current uncertainty in the real estate sector.
“Governments in the region are undertaking bold initiatives to expand affordable housing for low-and-middle income groups,” says Shezawi. “Developers at IPS will put affordable housing units, expected to attract first-time-buyers and younger investors. Prices are relatively lower, it is a good time to buy.”
See related story: The need for affordable housing in UAE
Abdelbasset Betraoui, Managing Partner of property consultancy and chartered surveyors Land Sterling, and bronze sponsor of the event to be held at the Dubai World Trade Centre, concurs as the slowdown is seeing developers launch at better rates.
“The market will further soften. However, buyers shouldn’t wait, because even if you see a decline of 3 to 4 per cent over the next six months, developers won’t launch at these prices of Dh500-Dh550 per square foot forever, and they are selling out at these competitive prices. The opportunities exist and banks are financing them, you just have to search a little,” he tells PW.
Developers were diversifying, some still going for luxury, others mid-income, but new developers coming to the market in particular were targeting the lower earners in Dh10,000-Dh15,000 bracket wanting to stay in the UAE long-term, he stated.
“Luxury properties are harder to sell. Around 80 per cent here are working class, so why haven’t we tapped into this market? This money would otherwise flow back into India and other Arab countries. So, you see a lot more developers adapting to who has the money,” Betraoui adds.
“Rather than force the market to move forward by increasing salaries, they said let’s look at it from the other side, why can’t developers, and everyone in the supply chain building the properties, contractors et al, lower their profit margin, yet still build good quality? Let’s all take a hit together, albeit still making profits, and like this secure work for the next five to 10 years. I think that is happening,” he explains.
The result being that today around 30-40 per cent of the lower earners could afford to buy homes, whilst before it was just 10-15 per cent who could go for the properties starting at Dh1.5 million, says Betraoui.
He also reckons that rent-to-own schemes could emerge this year as a natural progression to affordable housing. “Developers have become more innovative in selling products, and their stock is reducing. The market hasn’t slowed down a such but rather adapted,” he says.
Thanks to its international flavour, and the fact that deals can be made right there and then, the IPS has proven in the past to be a high-transaction event. Last year 73 per cent of exhibitors, of which 72 per cent were developers and real estate agents, reported successful on-site sales.
“This is a professional show, no time is wasted just looking around, but it offers all the services, such as mortgage financing and legal consultancies, right there, for people who want to buy. In the last edition, developers, Dubai Properties and others, reported selling a good bulk of their units,” says Al Shezawi.
The show will be held alongside the Annual Investors Meeting (AIM), a high-profile event attracting government and private players in foreign direct investment.
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“It has been a strategic decision to hold the IPS under the umbrella of the AIM, as it means additional potential international buyers for the show,” says Al Shezawi.
“Investors will be looking for good deals in other countries as well, depending on what their criteria is in terms of investment. They will take into account security, currency exchanges, local regulations and the likes to decide what’s best for them,” he says, adding that he believes the fact that property in Dubai could be registered within five minutes online gave the emirate a competitive edge.
As in previous editions, networking events and forums discussing real estate opportunities and challenges will be at hand, while a Pakistan pavilion will feature for the first time, and buyers can check out new green technologies, including a recyclable house.
Indeed, one of the 300 exhibitors will be an eco-friendly mixed-use community, Wahat Al Zaweya in Al Ain, also silver sponsor of the show.
“We have around equal numbers of exhibitors from the UAE versus international, including GCC countries. Although the show has proven to be a successful tool for their sales and marketing strategies, it isn’t just about sales, developers and investors need a platform to exchange ideas, that’s why they come back,” says Kamran Mehdiyev, Project Director at IPS.
Source: Nicole Walter, Special to Property Weekly