As prospective investors look at attractive prices, one would presume that it's all about discounts and incentives in the current real estate market. However, there is still a niche segment of the market where buyers are willing to pay a premium for a distinguished lifestyle or access to exclusive amenities and views. These buyers are seemingly unaffected by price differentials and discounted rates. On the contrary, they are ready to overlook a cheaper option for what they are exactly looking for in a property.
Says Nina Pekina, residential sales and leasing consultant, Better Homes, "What we've observed as a general trend over the past few years is that the most common type of purchase that foreigners choose as an investment is a Dubai residential property; and, end-users who couldn't afford to purchase during the property boom, can now find a quality home in a prime location. Many are also willing to pay a little more for even a glimpse of the marina, the sea or golf course. A growing number of foreigners, primarily Europeans, consider Dubai to be a prime location to own a holiday home and, again, are willing to pay extra for the lifestyle that comes with the chosen property."
Buyers seeking lifestyle options are generally families with kids than single people, says Tanja Landsiedel, Emirates Living specialist, Fine & Country. "So it depends on the demographic [profile] you are looking at. Location will always drive the demand, and if the desired location has interesting facilities, this will attract potential customers. Currently the market is driven by location, and in some pockets you will find a shortfall of properties that match people's interests," says Tanja.
The current market presents plenty of opportunities to choosy buyers both in terms of prices and options. Mohanad Al Wadiya, managing director, Harbor Real Estate says, "If you are financially secure, have cash available, or can get access to finance, opportunity abounds. The real estate market has moved rapidly from being a seller's market to a buyer's market, which is good news for buyers. Nowadays buyers are getting a lot closer to true value, particularly with the willingness of sellers to negotiate. There now exists a greater range of choice and you can succeed in obtaining true value and quality in the property you purchase."
He adds, "In this new market reality, the fundamentals of purchasing or leasing real estate come to the fore — location, quality construction, infrastructure, return on investment (RoI), rental yield and views. For these reasons, projects like the Palm Jumeirah, Downtown Dubai and JBR are seeing an increase in demand when compared to other projects in Dubai. Investors should pay attention to the masterplan as a whole, as they don't want to pay a premium for a beachfront, fountain or lake view property then have a future project built in front of their unit, blocking the view or access, as this will have a dramatic impact on the value."
Striking difference
A look at the difference in pricing in different areas for similar properties is quite striking — sometimes as huge as Dh10 million or more — for extras such as a private beach or access to the marina or golf course.
Are you finding it hard to believe? Read on to find out how much extra money you will have to shell out if you are particular about what extras you are looking for when you invest in a property.
Dubai is well-known for its waterfront properties, and the Palm Jumeirah is undoubtedly one of the most sought after developments in the emirate. "Naturally, choosing a waterfront unit reduces the chance of being boxed out of a view," says Mohanad. "Beachfront or waterfront properties will surely perform better in the short-term and long-term, as demand will always be higher on these units."
Not surprising then that estate agents find it much easier to sell properties that have waterfront views, especially to end-users in high end developments such as the Palm. These buyers, Mohanad says, are looking for the added value that the waterfront view will bring to their lifestyle and property. "Some of these buyers are willing to pay up to 60 per cent more for a full waterfront view. When it comes to views, there has always been a global interest in waterfront properties," adds Mohanad.
In Dubai, waterfront properties do command a premium, but depending on the position of the property within the development, prices also vary, sometimes the difference could be massive. Naturally, the closer it is to the water, the costlier it is. Prices keep varying depending on how good the views are. For example, a signature villa on the Palm Jumeirah offering wider sea views is now available in the market for up to Dh26 million while a signature villa with limited sea view on offer can be purchased for up to Dh16 million, according to Harbor Real Estate. This clearly shows there is a niche market for properties with exclusive views and amenities, despite the sellers asking for huge prices. In today's market, someone, who decides to compromise on the views and chooses to settle for a Dh16 million villa, can actually use the difference of Dh10 million to invest in five villas in some of the leading developments in Dubai.
A garden villa on the Palm with views of the Atlantis commands a price of Dh8.5 million while a villa with marina views in the development fetches Dh1 million less. In the apartment segment, the difference doesn't appear to be as staggering as in the villa segment but there definitely is a difference in prices for properties depending on views and amenities. A two-bedroom apartment with full sea view at Shoreline Apartment, says Mohanad, costs about Dh1.7 million while road or marina view pushes the price down by Dh500,000.
The fact that there are buyers for these units shows that despite the crisis, properties with exclusive views and amenities continue to attract buyers whose primary criteria is a better lifestyle than price. Elen Manukyan, senior sales and leasing consultant, Better Homes says, "A client, who is looking to live in a beachfront property that comes with the vacation-home lifestyle, is willing to pay the necessary premium."
A 7,000 square feet villa on Palm Jumeirah with private beach access, sea view, large pool, extra majlis and landscaped garden costs Dh7.8 million while a villa in Jumeirah Islands, bigger in size at 8,801 square foot, offering garden views, is available for Dh4.6 million. "The Palm Jumeirah villa is more expensive because of the location and sea view, which includes private beach access while the Jumeirah Island villa offers only normal garden view and it doesn't have beach access, but it features a pool, community centre with recreation facilities like tennis courts," says Elen.
Golf course units
While waterfront properties have always been in demand, golf course units have often hogged the limelight. Ardent golf lovers would always choose to live in golf communities. However, even those who don't play golf or are not so much into it, nowadays purchase such units purely because of what they offer in terms of lifestyle and views. As in the case of waterfront properties, access to a golf course comes at a premium.
Fatima-Zohra Bourouis, residential sales consultant, Better Homes, says, "There is a considerable price difference between properties with and without golf access. A villa located at E sector of Emirates Hills Community with direct access to the golf course costs Dh30 million, while a villa at W sector without golf course access is available for Dh18 million." The price difference between the two units is as big as Dh12 million, which, given the current scenario in the market, is a substantial sum for a property buyer — the only decision he will have to make is whether to purchase 12 apartments or six villas with this money.
"Apart from the direct access to the golf course, the first villa also has a large pool, gymnasium, lift, sauna, jacuzzi, theatre, landscaped garden, outdoor gazebo and one-year free access to Montgomery Golf Course," Fatima-Zohra says. Jumeirah Golf Estate, now under construction, is another golf community that's coming up in the city where Dubai World Championship will be held by the end of this year.
Marina units
Dubai Marina, since its launch, featured on the investors' radar. Even after the crisis, good quality buildings located close to the marina continue to attract buyers and tenants. And yes, access to the marina doesn't come cheap, you have to be ready to shell out a few hundred thousand dirhams extra if you want to own a unit on Dubai Marina offering direct marina views. Tanja of Fine & Country, says, "Fairooz villa in Marina Towers offers marina views and has access to Marina Walk with various restaurants and coffee shops via elevators. It also has Marina berths, a spa, gym and an outdoor children's pool. The current price of this villa is Dh1,600 per square foot while an Al Sahab villa in the Marina, which offers communal views costs Dh1,000 per square foot."
The Dubai market has always attracted buyers with its wide variety of properties and continues to impress them with plenty to choose from, although some units still come at a premium.
Dh12 million difference?
An Emirates Hills villa with direct golf course access costs Dh30 million, while a villa without golf course access is available for Dh18 million.
What makes the difference?
The closer a property is to water, the costlier it is. Prices also keep varying depending on how good the views are or how close a home is to facilities.
