Branching out as per demand
Dubai's growth has been fuelled largely by its focus on luxury developments. The city's entire image is based on the opulence found in some areas of Dubai. However, as the market matures, developers are starting to pay attention to the demand of end users - tenants in Dubai.
Firstly, the market has clearly slowed down, both in terms of price and transactional activity. Developers are taking notice and now offering greater incentives and longer payment plans to entice new buyers to commit to their projects. Until now, what has largely been ignored is the "pattern of buyer behaviour in secondary markets," says Sameer Lakhani, managing director, Global Capital Partners.
"When a granular analysis is done, what emerges is community concentration, with JLT and Dubai Marina emerging as the top spots for mortgages among apartment buyers. Sports City and Jumeirah Village Circle recorded the highest percentage increase in this segment on a year-on-year basis, while Emirates Living and Arabian Ranches were the preferred destination for villa buyers." According to him, this indicates a slowdown in transactional activity among cash and speculative buyers.
In addition to this, developers are recognising that Dubai is growing rapidly and needs to meet increasing demand on the property front. However, when it comes to new projects, experts agree that the market is shifting towards a more "organic and demand-driven one," catering to all segments of the population, including those demanding more affordable options.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. While Dubai is gearing up to launch a series of mega-projects ahead of the Expo 2020, there is clearly a focus, on the part of developers, to introduce more affordable options as well. It will be interesting to see how the mix of the two balance each other out and help bring about a more stable market.