Developers eye end users. Weekly Dubai real estate news digest. Issue 88

08.03.2015
Developers eye end-users 
Welcome to the eighty-eighth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 88 |  March 8, 2015

Developers eye end-users 


Earlier this year, it was predicted that the Dubai real estate market could sustain growth by offering more affordable housing options. Now, it appears developers are doing just that.

In this past week, Dubai developer Nshama made headlines with its new project, Town Square. Head by former Emaar CEO Fred Durie, the developer has placed its eyes firmly on a niche offering: affordable housing.

"We are targeting middle income people earning around AED20-35,000 a month. These are the people who renting right now and they can't afford to buy - this opens up an entirely new market segment," said Durie. Town Square is spread across 750 acres and will feature over 3,000 townhouses and 18,000 apartments in addition to substantial retail, hospitality and commercial space. 


"Property markets across the world are driven by 'end-users' or 'middle class,'" Simon Gray, managing director, Chestertons MENA, had said earlier. "UAE can also benefit tremendously by introducing attractive propositions for this segment as majority of the residents can look at owning a property and create a sustainable market proposition."

While developers may be shifting their attention to the end-users in the market, the city continues to attract international investors as a result of its premium offerings. In fact, Dubai still ranks among the top 10 most important cities for ultra-high-net-worth individuals. 


Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. The changing outlook on the part of developers is essential for moving forward. As Durie pointed out, this kind of housing is something that Dubai needs for its 2021 vision and for Expo 2020. Not only that, but by targeting end-users, developers would reduce speculator interest, promoting sustainable growth in the city.

Sincerely,

Pashma Manglani

Editor


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Townhouses sell for under AED1m

One developer in Dubai is attracting attention by offering a “limited” number of three-bedroom units at its newly launched Town Square community at prices just below AED1 million, Gulf News reported.

In all, 300 ‘Zahra’ town houses are being released by Nshama Development and another 700 units will be on offer in the coming week or two.

Town Square — located further down the road from Arabian Ranches — will cover 750 acres and feature 3,500 town houses and 18,000 apartments. The whole project will have a build phase of 10 years, with around 3,000 homes being delivered each year.

 

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Property price slide deepens

A decline in Dubai residential property prices is steepening as foreign interest dries up, new research says.

An article in Financial Times quoted research by Phidar Advisory, which has revealed that apartment sale prices fell by 3.7% in the first six weeks of 2015. Meanwhile, prices for villas fell 3%.

“Dubai residential demand is teetering,” Phidar said in a note. “Price decline is gradually accelerating.” 

 

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Developers change strategy for luxury realty

Dubai developers are working on a new tack: offering premium off-plan units on a "by invitation" basis to appeal to investors, Gulf News has reported.

“Purchasers at these price points — of AED15 million and over — tend not to be speculators and would expect a discreet service offering,” said Simon Townsend, regional Head of International Capital Markets at DTZ.  “But the majority of launches in Dubai are targeting the mid-price markets suggesting that market dynamics continue to evolve.”

 

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Dubai spends $1b on post-crisis project

Dubai has announced plans to build a $1 billion (Dh3.67 billion) development in the heart of the emirate’s financial district, the first new construction project there since the softening of the property market during the global crisis of 2008.

Gulf News reported that the development, next to the cluster of Dubai International Financial Centre (DIFC) buildings, is also the first project by a joint venture between Investment Corporation of Dubai (ICD) and Brookfield, the Canadian property manager.

Adjacent to the core buildings of DIFC, the project will comprise a 50-storey office tower, hotel and retail outlets. 


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Dubai still attracts the ultra-rich: Report

The property market may be cooling off, but Dubai still ranks among the top 10 "important cities" this year for "ultra-high-net-worth individuals" (UHNI). Topping the list just issued by Knight Frank in its latest Wealth Report are London, New York and Hong Kong. Dubai is in the eighth spot.

Gulf News reported that Dubai is ahead of Beijing and Zurich but comes behind Singapore, Shanghai, Miami and Paris as the choice cities of the uber-rich (Knight Frank defines this as anyone who has $30 million (Dh110 million) worth of assets). Dubai is believed to have seen a 5% increase in its UHNI population in 2014.


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