Dubai: Rather than flooding a soft market with new properties, Dubai’s developers are offering their super-premium off-plan units on a “by invitation” basis to get through to the right sort of buyer. This way, the developers hope, they can keep their sales and marketing cycles — which can prove quite an expensive proportion the longer they remain unsold — for new projects down to optimum levels “Purchasers at these price points — of Dh15 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. “For completed properties, we are certainly not getting the impression that owners are regularly withdrawing the listings due to a lack of investor interest.
“But the majority of launches in Dubai are targeting the mid-price markets suggesting that market dynamics continue to evolve.”
All through the slowing down in market transactions in the last six months, that within the luxury category was most pronounced. Until the recent stream of new projects — or even revived ones — being taken up in locations such as Silicon Oasis, Sports City and Jumeirah Village came about, developers’ focus was overwhelmingly glued towards launching and selling high value properties.
According to Matthew White, Director of Sales and Leasing at Chestertons Mena, the number of listings for sale of high-end properties have gone up in the last three to four months. “However, the uptake of such properties has been on the lower side … also high net-worth investors are preferring ready properties as opposed to off-plan,” White said.
Another tack that prestige developers are using is to offer high networth investors the canvas to design their own homes. Dubai Hills in MBR City is one such, with the shell-and-core handover due June of next year,” said Ian Kirby, Luxury Sales Director at Luxhabitat. “The average price of a villa in this development is Dh25 million.
“Meydan Sobha is scheduled to hand over next year, with an average selling price per villa at about Dh17 million.”
If it is an apartment that luxury preferring buyers are looking for, a penthouse apartment on the sky-bridge at The Address Residence Sky Views is quoting “up to Dh20 million”, according to Luxhabitat data. The Downtown area currently has eight off-plan projects in their development roll-out.
“If investors still prefer an established premium destination but do not want to pay a heavy premium, they are committing to smaller units at a lower price there,” said Chandrakant Whabi, CEO of Acrohouse Properties.
Meanwhile those investors holding super-premium completed properties in their portfolio are even going for selective upgrades “as a business model because they’ve identified the gap in the market to meet the demand of certain high networth individuals,” according to a Luxhabitat spokesperson.
“The amount of quality properties in this market is still very limited and demand is still clearly undersupplied. Several developers have finally realised after several years that the average quality of the existing supply is quite low for international standards.”
