Which Dubai properties are still selling at a premium?

Dubai: Not every property deal in Dubai right now is being done at a bargain. Whether at an upscale location or a more mid-market community, there are transactions where the seller has managed to meet his expectations on price.

Here are some deals struck this month that suggest this to be the case. At the Palm, a one-bed in Marina Residences was picked up for Dh1.7 million, whereas it was being quoted for Dh1.62 million as recently as May. That’s a 5 per cent gain for the seller, according to Reidin-GCP data.

In Discovery Gardens, a studio deal netted the seller a 19 per cent gain - as against the Dh286,000 it was listing for in January, this month saw it being sold for Dh340,000. (The unit is located in the Mediterranean cluster.)

There was also a one-bedroom at the Emaar 6 tower in Dubai Marina where the gain between February and August was a healthy 12 per cent. The apartment sold for Dh1.95 million against the Dh1.73 million it was listing earlier in the year.

A clear pattern

There are other transactions that have more or less stuck to the 5 per cent or more gain from the beginning of the year to now. Yes, they still represent a small number, but coming at a time when prices across the wider Dubai property market are still under pressure, they do make a statement. So, what could have helped raised their final closing sale price in such a short timeframe? The answer, according to Sameer Lakhani, Managing Director at Global Capital Partners, could lie in the value addition the sellers did on these properties before the sale.

“The upgrades done helped firm up prices even in an extremely downbeat market. These could have been cosmetic upgrades, done to the flooring for instance. But these seem to have helped the seller at a time when so many properties listed for selling in the secondary market have the same sort of upkeep or quality. Any seller who ditches the cookie-cutter approach is getting what he wants... at least the data suggests so.

“As to whose buying and how, it’s a mix of cash and mortgage buying that’s happening. But it’s becoming clear that mortgage-based deals as a percentage of the overall has come down, with buyers opting for post-handover installments.”

Sure, paying for upgrades means an additional cost, not to mention the higher risk if even with these additions the seller fails to get close to his asking price. But to better stand out in an overcrowded marketplace, those value-adds may well be worth the risk. A payoff of 5 per cent and over at the time of selling is definitely so.

Value buying opportunities

Latest buying trends indicate that locations such as International City and Discovery Gardens are seeing a lot of traction. Investors are attracted by the notion that prices may have reached the bottom at some communities in this cycle, which means this is a decent time for them to start buying again. More so, as both locations still are top attractions from a renter’s perspective.

“At International City over the last 45 days or so, there’s been a spike in interest. There may be the odd distress sales happening at a lower price, but more buyers realise current rates are near the bottom,” said Sailesh Israni of Sun & Sand Developers, which is building a ground plus six storey apartment block there scheduled for handover next year. “Units at a good building can fetch Dh700-Dh750 a square foot based on net sellable area - I think that’s quite reasonable under the circumstances.”