Dubai: Dubai’s freehold property market has put together its best three successive quarters since 2008, but new investors prefer only the established communities.
This factor is propelling value gains in communities such as Arabian Ranches, The Springs and Jumeirah Islands in recent weeks and is why a villa on the Palm Jumeirah could command Dh17,200 a square metre in a recent transaction.
Activity within the Burj Downtown was helped by the Arab Spring and the subsequent flight of capital to safe havens. Meanwhile, resident end-users had Business Bay in their sights, especially the set of high-rises fronting on to Shaikh Zayed Road.
“Generally, we witnessed an increase in demand for properties within well-established projects as these have a better chance to move quickly,” said Saeed Bushalat, CEO of Salwan, the property services company. “Also, we have seen an increment in sales in developments from well-known developers which are either complete or under construction. The freehold market has reached a more advanced level recently, with better historical data on developers and specific areas in the market.”
But if investors opt only for known locations, the concern is that this would lead to a lopsided recovery for the broader property market in Dubai. Developers and other property firms participating at Cityscape Global 2012, which opens on Tuesday, are hoping the event will offer a glimpse into “What next?” for Dubai’s property sector.
“The Dubai residential market remains highly fragmented in terms of individual property performance,” Matthew Green, head of research and consultancy at CBRE, said.
Correction
This is what Dubai’s authorities and developers are trying to correct. As part of the process, the claims of Dubailand are getting highlighted once again. This was one master development drastically affected during the downturn, with projects getting downsized or scrapped altogether.
The government-owned Dubai Properties Group (DPG) has now re-launched phase 1 at the Mudon Development in Dubailand to build 348 townhouses with completion in 18 months flat. The developer also signed up Emaar for a community-type project adjacent to Arabian Ranches.
Will the refocus on Dubailand pay off? “Dubailand is definitely an up and coming area with a massive amount of investment being pumped in,” Mario Volpi, head of residential at Cluttons, the consultancy, said. However, this may not happen overnight. “It needs to be more developed before it becomes an area of destination i.e., more amenities and established facilities before buyers request for this location specifically.”
Beyond Dubailand, industry sources see prospects for Al Furjan, a Nakheel development south of Ibn Battuta Mall and adjacent to Discovery Gardens. While the first phase homes are being handed over, the commercial and retail offerings, according to Volpi, are still 12 months away from completion.
For a different class of investor, there are the premium offerings within Jumeirah Golf Estates.
“Further demand will be evident from overseas buyers escaping economic woes in the Eurozone and political instability in other parts of the region,” said Vineet Kumar, associate director — agency at Asteco. “The sales market has seen steady increases, with the number of owner-occupiers rising steadily in line with improved finance options offered by banks, which we expect to continue.”
