Dubai: For the budget-conscious property buyer, there is only one way to go in Dubai — South. With the latest off-plan releases there — the ParkLane with studios from Dh300,000 — the investor rush is not going to cease any time soon.
According to Reidin-GCP data, 6,160 off-plan units have so far been released at Dubai South and the Parklane would take the tally to 7,364. The Parklane is directly from the master-developer, Dubai South.
Some of the earlier releases, including those from other developers, have been instantly snapped up. Some estimates suggest that of the 60,000 or so new homes that Dubai will absorb in the period up to and including 2020, Dubai South might have about half of them.
While “it’s virtually impossible to ascertain what percentage has been sold, what we can see is that Dubai South is rapidly becoming popular as a destination for investment,” said Sameer Lakhani, Managing Director at Global Capital Partners. “The reason is it caters — perhaps more so than in any other community — the concept of mid-income housing.
“Based on the year-to-date transactions, Dubai South is already the third most heavily traded community this year (672 per cent rise on a year-on-year basis). At the current trajectory, it will be the most popular transacted community by the end of the year.”
Dubai South totalled 1,312 transactions in the year to August, just behind the Nakheel built Jumeirah Village Circle (1,572 units) and the Downtown (1,530).
By 2020, Dubai South could see a residential base of 30,000 units and more and be home to 1 million residents by 2030. “What the Parklane launch indicates is the continuing trend of “gentrification”, as developers offer units that have more of a lifestyle and integrated community feel (such as golf courses, mall, community parks, etc),” said Lakhani. “We opine that this trend will continue.”
With all of the demand, it is no surprise that South-side prices are firming up from where they were a year ago. Against the launch price average of Dh660 a square foot, the prevailing range is Dh850-Dh900. “In the secondary markets, these prices are holding, suggesting that the rise has been absorbed in the marketplace, which is itself indicative of the latent demand inherent,” Lakhani added.
Current prices for one-beds range between Dh400,000-Dh700,000, and two-beds at Dh750,000 to Dh1 million.
But Dubai South is far from being the cheapest alternative for someone to get onto Dubai’s property bandwagon. That still remains International City, prices between Dh675-Dh725 a square foot, and Discovery Gardens’ apartments from Dh775-Dh825.
“Dubai South is already becoming a community that is being “re-rated” upwards in the eyes of investors, despite the fact that the majority of infrastructure works have yet to be complete,” said Lakhani. “Investors (and end users perhaps) have caught on to the maxim that in the real estate space, it’s more about future location as opposed to the current location where the price premium baked in is already out of reach for the majority of investors.”
But investors who want to rent out their Dubai South holdings need to take the longer view. The location is still a good 45 minutes and more from the city centre (always based on the traffic situation, of course). “When the first properties are put up for rent, landlords have to price in the factor that the community is still developing. A lot of completions are centred around 2020 ... that would be the crunch period.”
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