Dubai: These days, the Dubai property market’s dynamic is in constant change.
If the number of Russian offplan buyers – who had helped turbocharge the market for nearly 2 years - is seen as levelling off, there’s always another overseas buyer demographic stepping in.
After an unsteady June/July, the dollar is regaining some of its strength and which could leave non-dollar linked overseas investors vulnerable. But a top Sobha Realty official said those calculations are not clouding any of the buying activity in Dubai.
“Today, Chinese investors have become more active, while (incoming) Indian investors have also been almost consistent,” is how Francis Alfred, Managing Director at the luxury developer which has been hitting the market consistently with its next round of offplan projects.
“We see a lot of activity within the Emirati buyer community coming in, especially in the luxury side. We all know that the Dubai property market compared to H1-2022 increased by nearly 40 plus percentage.
“We can see that buyer demographics are changing, though that doesn't mean that Russian and European investors have reduced. They're still there, just not compared to the levels of 2022.”
A ‘United Nations of property buyers’ in Dubai is how developers are putting it. And this buying still has the momentum to see through ebbs and flows, they add.
All through summer, the Dubai property buyer spree continued to steam along, dismissing some forecasts suggesting it could well be a slow period. As has been the case with summers from the not so distant past.
Simultaneously, there had been talk that the overall buying and selling growth would see a levelling after what has been an exceptional 3-year spree (to the month. It was October 2020 that property market here started seeing a rush of enquiries for luxury and spacious living options after the initial Covid phase.)
This Dubai growth is ‘durable’
Sobha Realty has been one of the beneficiaries of the need for bigger spaces. It’s a formula that the developer is repeating with its recent launches, whether it’s a community or a sparkling tower on Shaikh Zayed Road.
The company is also not changing its payment plans, with 20 per cent needed as down payment. “We are someone not fond of post- handover payment plans,” said Alfred. “Even during a very down market, we give a very small percentage of such plans.
“We do not have any situation where existing buyers are asking for an extended payment solution (because of higher interest rates, etc.). It could probably be because we are playing in the luxury market segment. Maybe, our customer base is still isolated from the global interest rate trends.”
His confidence comes from some hard numbers, with Sobha recording Dh10 billion in sales during 2022 and hoping to improve on that this year. (Its average property values tend to be in the Dh1.5 million to Dh2 million range.)
“As I said, the market is growing by almost 45 percentage from last year to this,” said Alfred.
”We have enough land bank for the next three years, (and that’s good) for development at the speed at which we are going.
“The two master-developments - Hartland II and Sobha One – we are building are 20 million square feet and probably Dh40 billion worth. We also have individual projects, including the Sobha SeaHaven, the S Tower on Sheikh Zayed Road, and Verde in JLT. This also launched this year.”
No to rent-to-own
With all that in the pipeline, Sobha’s intent is to keep pushing sales – and not get into the rent-to-own space.
“To be honest, we have not contemplated that option, because if you see the market has been doing better. This is despite the industry’s challenges, which probably we all are aware of. So, as we speak, it is not a priority.
“From our customer base at least, we know that is not an option they are looking for. When there is a finance option put forward either by the developer or by a bank, there is a cost to it. Customers today are okay with their current financial situation where they take a property at the right price, rather than take on other costs. At least, this is my understanding of the current situation.”
With Dh10 billion in sales, who’s going to argue…