PW talks with Nakheel’s CEO, Sanjay Manchanda on how he defines affordability in Dubai’s real estate market and the company’s plans in this segment.
Can affordable housing schemes be offered here and how?
I think it will come with time. Currently you see a pent up demand for single homes, or luxury apartments, or mid market offerings that we have. Across our portfolio you can get a dwelling unit from something like $100,000 (Dh367,000) starting in International City, and a house in Warsan Village starts at Dh2.3-2.5 million.
Can you call this affordable housing? I can’t put my finger on that, because every time this phrase is mentioned people are thinking of the West -- specific facilities that have been created by the social system, there is no such thing over here.
The local population here is very well taken care of, there is a housing scheme for them by government. Then you have the expats, of which a very large section is blue collar workers and they are all given accommodation by their employers. Then comes the middle management that’s the sector everyone is attracting now, who make a decision whether they want to buy a house or not.
Aren’t those middle-income buyers, the ones who have difficulties purchasing?
Some of the statistics coming from Dubai’s land department (DLD), such as the number of transactions via mortgages, have gone up substantially, and that means these buyers, have been able to access the financial sector to buy a house.
Similarly, at the higher end, entrepreneurs and senior executives can go and get what suits their pocket and is value for money. So the reality is getting slightly mixed up with someone wanting something that is affordable for everyone, yet ignorant of the sub-sectors of society demography.
Is there enough offering at all levels of the salary scale?
If you say you’re going to be here for the long-term and don’t want to pay rent for a home, and see if you could find a studio, or one-bed, sure you can find something. If everyone wants to live in the centre of the city, sure there isn’t enough room for each and every one of us, but exploring further there is.
I don’t think there really is an issue with affordability, developers have recognized it, and that’s why a lot of the new developments coming up are addressing those price points. New projects launched at around sub one million dirham was previously unheard of, the market is responding to what is affordable.
Can you predict market cycles and plan ahead?
There are factors that we as a developer cannot foresee, or forecast. In this environment it is foolish to say we have a long-term plan in place. I think we have to be nimble on our feet to recognize the trends and challenges and respond to market changes swiftly.
Will any of your new projects fall into the affordable bracket?
At this point in time we are not looking to build projects targeting this price point. We’re focusing more on creating an asset base for our own business.
We do have our existing projects, where we are still selling, such as the Warsan Village villas, Jumeirah Islands townhouses and Al Furjan. At the high end, we have The Palm Tower and Palm 360, the latter we are still in the phase of finding the perfect configuration, design and pricing.
What about residential offerings at Deira Islands?
Yes, there will be a residential component as well, but we are focusing on the lead aspect first. The Night Souk is in a very advanced phase of construction, we announced the award for the Deira Mall, are working on two hotel properties, and soon be announcing more activities on the islands, such as the 16 buildings along the Boulevard, and a lot of marine work is being undertaken.
Rome wasn’t built in a day, so Deira Islands will take some time. We are on a mission to put the infrastructure in place to make sure that when things start coming on stream we’re not fumbling for missing pieces in the puzzle. We will build the residential ourselves.
Will it be luxury homes, considering the destination?
I am not privy to divulge everything now, but I would like to state we will very much look at what the market demands. Waterfront properties and affordability are poles apart by nature, but we would make some parts of Deira islands within the common man’s reach.
We believe that Deira Islands can capture the intra-emirate population, those in Sharjah who want to live in Dubai, we can provide them something just on the edge and people would be very happy.
