Dubai’s Property Market Slows, Developers Still Upbeat
Although Dubai’s real estate market has been sliding, the Emirate developers have launched several new projects
Walking through the exhibits at Dubai’s biggest property extravaganza, Cityscape Global, we were surprised to see packed halls and vast stalls. The exhibition popularly referred to as the barometer of Dubai’s real estate market, seemed to offer a different perspective from the ground reality.
All the real estate reports that have been published over the last 6 months have been consistent in their stand that Dubai’s residential market is slowing. Sales transactions within the segment fell by close to 20% Y-Y during the 1st 8 months of Y 2015, consultancy CBRE said in its latest report.
Total sales dropped to Dhs 31.74bn between January and August 2015 compared to Dhs 39.56bn during the same frame a year ago, according to data from the Dubai Land Department.
The report also found that sales prices declined by 2% Q-Q, and around 6% Y-Y in Q-3.
“While global economics have certainly reduced investor sentiment and impacted sales, the slowdown is also attributed to a price correction resulting from market stabilisation,” CBRE says.
However, there was no note of pessimism at Cityscape this year, with flamboyant displays and new launches by developers.
The 14th edition of the event had over 300 international and regional developers exhibiting across 41,000sqm at the Dubai World Trade Centre. The 3-day event also attracted around 47,000 participants from around the world, according to the organisers.
A slew of new developments in Dubai were announced around the event: Dubai Properties unveiled its luxury residential development 1/JBR while Emaar Properties launched the Creekside 18 Residences, an apartment complex located within the island district of the Dubai Creek Harbour project. The project consists of 480 residential units in two 37-storey towers.
Meanwhile, Damac Properties unveiled the world’s 1st villas designed by luxury car brand Bugatti within its Akoya Oxygen development. The high-end units were displayed alongside a Bugatti Veyron.
Another major developer launch was announced at the recently re-branded Dubai South called The Villages.
Spread across 1skm, the development will comprise of a cluster of residential buildings centered around a community core featuring a school, civic center, health and wellness complex and high street and retail outlets.
Development of the 1st village will begin by early Y 2016 and will be handed over in Y 2019.
State-owned developer Meydan also displayed its upcoming mega project Meydan One, which will include the world’s tallest residential tower, longest indoor ski slope, largest dancing fountain, highest observation deck and highest sky restaurant.
The developer’s project is geared towards providing leisure and entertainment options even as Dubai gears up to host Expo 2020.
The Burj2020 development was also unveiled during Cityscape. The architects behind the development, Adrian Smith (of Burj Khalifa fame) and Gordon Gill, were present at developer DMCC’s stall and said the ‘supertall’ Burj2020 tower has been designed to become “the Diamond” of the Dubai skyline.
According to DMCC chief executive Gautam Sashittal the new mixed-use development will cater to growing demand from the freezone’s clients.
“We have 107 new companies coming in every month, out of which 85 per cent are new to Dubai. So we are confident that there is adequate demand,” he says.
Nakheel’s COO Aqil Kazim voiced similar sentiment.
The developer launched 2 projects at the event, Jebel Ali Gardens – a 40,000-person community – and The Palm Promenade – a 1.5km retail and leisure strip along the Palm Jumeirah’s trunk.
“We believe every project is unique in its own right and is backed up with some kind of business plan; if we do not see a need, we won’t do a project,” he states.
Despite concerns in the market, the company has not dropped its prices and is continuing to post “healthy sales”.
“In terms of sales I have seen a change in the demographic of the investors, I am seeing more end users and that’s a fact. What we have seen is maybe a decrease is speculator purchases. But overall sales, as far as we are concerned as a business, are as per our expectations… We are healthy and we have no problems in terms of numbers.”
The developer added, “If there is a price drop, then it’s a correction which is natural in any market.”
By Aarti Nagraj
Paul Ebeling, Editor
HeffX-LTN
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