Dubai: If 2017 was about post-handover payment plans, developers in Dubai are taking an aggressive stance on prices with their latest off-plan launches.
Sev7en Tides set the ball rolling, going below Dh1,000 a square foot for its “Se7en City” multi-tower project in JLT (Jumeirah Lake Towers) last month. And it paid off, with the developer selling all 600 plus units making up its first round of sales within seven days. The process would eventually net Dh600 million once the units are handed over.
The pricing — both in per square foot terms and for the overall units — was instrumental in drawing in the heavy buyer response, according to market watchers.
On Wednesday, it was Danube’s turn to go all out, launching the “Lawnz”, which it says will be the first community-style development within International City. Launch prices have put a price stamp of Dh290,000 for a studio and Dh499,000 for a one-bedroom. The per square foot price would be Dh750, which is more or less in line with the prevailing average for better quality projects in International City. The Lawnz, expected to cost Dh550 million, is aiming for a 2020 handover. It will have more than 1,000 residential units.
“The launch of such a large project at such a crucial time reflects our confidence in Dubai’s real estate market,” said Rizwan Sajan, Chairman of Danube, in a statement. (Danube now has a project portfolio of Dh3.7 billion, including those that it has handed over.)
A hit with buyers
It could well be that developers — even those with luxury projects — will have a closer look at how they structure their launch prices. Get that right and they are sure to hit the sweet spot with buyers, whatever be the state of the market.
The Se7en City launch and now that of the Lawnz could even prompt developers to bring forward their launches rather than wait until the start of the new season in September. And this way compensate for an extremely lacklustre off-plan launch and sales phase in the first four months.
Industry sources believe that last year’s emphasis on port-handover plans was creating distortions in the market. More so, when some developers were allowing up to 10 years on recovering their monies from buyers.
For potential property buyers, the latest Reidin numbers suggest now would be a good time to consider doing so. The price-to-rent ratio for apartments in Dubai is estimated to be 14.1 — a reading below 15 is reckoned as a good time to buy. Anything over 15 and above would be better for renting. (The price to rent is based on the property value divided by the rent it can fetch.)
