Dubai: All talk of demand for property in Dubai being in terminal decline is greatly exaggerated, industry insiders said on the first day of the International Property Show.
“In the first quarter of this year, Damac Properties is looking at somewhere north of Dh2.7 billion in off-plan sales — and that’s similar to what we had in the fourth quarter of 2014,” said Ziad Al Chaar, Managing Director.
“Traditionally, fourth quarters are always the busiest period for property sales, but if our Q1-2015 transactions are matching those, it does mean that a lot of people are still interested in buying in Dubai.
“We have not changed any of our terms and conditions in the sales contracts to prop up the first quarter numbers. What we had, in January, such as buyers getting a car if they booked units, were only applicable during DSF.
“If some people keep saying the market is in correction phase, it’s their problem. That’s not happening with us ... and other developers in Dubai need to send out a strong message about what’s happening in the market.
“International buyers are still buying from us, at Akoya, Akoya Oxygen or one of the many hotel apartments we are developing. In the last three months, we held 50 active interactions in overseas markets trying to get through to buyers. One of our teams has just come back talking about potential interest in Dubai from buyers in Shenzhen [China].
“It’s the responsibility of all the leading developers to scale up their international marketing efforts. The buyers are out there and they are interested in Dubai for the simple reason that registration charges are low.”
That Dubai’s residential property transactions are still holding up is confirmed by other sources.
“Based on our estimates, February transactions — for off-plan and completed — would be around Dh2.37 billion, against January’s Dh2 billion or so,” said Chandrakant Whabi, CEO of Acrohouse Properties.
“That does compare well with the sub-Dh2 billion volumes recorded in both November and December.
“First quarter 2015 numbers also have a few transactions for very high-end properties in Emirates Hills and elsewhere, and that would have skewed the figures, but only slightly.”
But the circumstances are such that developers may have to make changes on their upcoming launches. No one in the market wants a situation where a lot of new inventory comes in at about the same time and remains unsold. That would have consequences for the secondary market too.
As for the secondary market, anything that is built continues to have takers — “We are now seeing a shift to end-user clients looking for luxury good quality homes to live in,” said Luke Hexter, Head of International Markets at Luxhabitat. “Off-plan projects have tied up a lot of capital … so we could see a surplus of completed properties handed over in the coming months. However, as always, good quality stock at the right price always sells.”
Through the second half of last year, property values did come some way off from their highs. But it is for a prospective buyer to decide whether values have softened enough for him to make an entry now.
“Some parts of Dubai had seen higher prices than [even in] the boom times of 2008 … for example, Dubai Marina was 4 per cent more expensive on average in [early] 2014,” Hexter said. “Government measures to cool the market have had their desired effect and recent pricing and [property] transfers reflect this.”
