Dubai: Dubai’s property market is ready to take on more Dh300 million luxury home deals because there is genuine demand backing this up, according to a developer who is building multiple projects with prices at Dh120 million and over.
“There is a clear shortage in inventory in Dubai’s super-luxury residential category, and developers are seeing too many enquiries each week,” said Syed Azeem Mehroz, Group CEO at Alpago Group, which is building six villas in what has been termed the ‘Billionaires’ Row’ on the Palm. “Dubai’s luxury real estate has got itself a high profile with global investors, and that’s been fuelling the enquiries and sales.
“This is not speculative buying or pricing. With Dh100 million homes, no developer is thinking of offering anything less than the highest quality. The prices then reflect what’s going into those homes.”
For Alpago, this strategy of super-luxury is paying off, having just sold one of the six Palm villas for Dh128 million ($35 million). This particular one is still in the being-built stage, while two are ready to take on buyers. The base price is from Dh120 million.
Others in Dubai’s property market echo the view that demand is what’s behind the spate of Dh100 million deals, which could even hit $100 million ones going by this momentum. Last week, the Dubai Land Department data showed one transaction for Dh317 million at the Burj Khalifa, which, sources say, could be for a ‘floor or two’.
True ‘value’
“These price points – of Dh300 million and over - is a direct reflection of the value proposition those homes offer, through a combination of location, design aesthetic, design quality and amenities,” said Georgia Peacock, Private Client Advisor at LuxuryProperty.com. “There are properties, for example, that have home cinemas on a level comparable with the most premium movie theatres, or home gyms that are almost worth paying a subscription for.
“Developers, particularly in areas like the Palm, are already testing out higher price points for the most premium off-plan properties, with triplex penthouse units available at upwards of Dh250 million. I believe they will start to push that limit higher, but the key thing is that the value the property offers has to justify that price tag."
Not over-heated
The key point is that such asking prices are justified, going by the feedback of developers and estate agents. Plus, this is not speculative buying based on a minimal down payment and then hoping to find a new buyer willing to pay more.
Instead, these deals are based mostly on instant cash, and if not, on terms where the payments are cleared within a short span. As Mehroz succinctly says it, “These are properties that we can sell without a payment plan…”
The majority of deals done in Dubai for Dh100 million homes were with end-users, or those who want to use Dubai as a base for the better part of the year.
Will developers come up with more?
As of now, only a handful of developers are launching offplan projects featuring Dh100 million home options. Most of the available ready homes have already found buyers, and which is why there is a good chance that more launches could happen towards the last quarter. But developers need to be sure that the demand they are seeing at the moment will continue.
There are properties, for example, that have home cinemas on a level comparable with the most premium movie theatres, or home gyms that are almost worth paying a subscription for
Palm ‘Flower’
Mehroz has no such doubts. Alpago has got another project getting off the ground at the Palm, a ‘one apartment to a floor’ only building. The top floor unit at the Palm Flower will eventually have a price tag of Dh250 million or over, depending on the market dynamics.
“The concept design from Foster + Partners has been done, and we are working on the additional elements,” the Alpago CEO added. “The ground-breaking should be around September/October. All of the internal creative work is going on ahead of that.”
The Palm Flower could eventually cost Dh1.2 billion to build.
