Back with a bang

Back with a bang

You may have read recent reports of a tsunami of new luxury property launches hitting Dubai as eager developers seek to tap wealthy investors with cash to splash.

By Michael Lahyani (PROPERTY FOCUS)

Published: Sun 17 Mar 2013, 9:14 PM

Last updated: Sat 4 Apr 2015, 9:14 AM

And it is certainly the case; in fact barely a day goes by when I don’t hear about a fabulous new luxury apartment block opening up or plans for a mammoth five-star hotel being unveiled. It seems investors have realised that Dubai is not a boom and bust city, despite a few hiccups in the past, and that it can now offer investment opportunities to rival anywhere in the world.

The one factor that all these impressive new launches have in common is the emphasis on upscale. There is undoubtedly far more confidence in the higher end of the market, which encourages wealthy individuals to step up with cash if they perceive the risk is low. Generally, the big players like Emaar have done extremely well promoting a brand and product that people can trust and so cash rich investors are willing to make stage payments through the construction period.

In fact, it has been a very busy couple of months for new property releases with Emaar adding another 500 units to its portfolio of freehold serviced apartments with the The Address Residence Sky View — plus Damac holding the sales launch of its Dh1.2 billion residential high-rise in Dubai Marina, a project which has the glamorous edge of being tied in with luxury fashion brand Fendi.

While demand has been dominated by residential offerings, local developers are also trying to drum up interest for prime office space. The mixed use Burj Daman has released 680,000 square feet of top-of-the-line office space set over fifteen floors in DIFC, for example.

Let’s be clear, more high-end real estate coming on to the market is a good thing because it shows that developers are now building what end users really want. It might not feel like it, but there is a massive shortage in Dubai of quality developments — too many of the projects that were constructed during the crazy boom years were sold to investors that were not the end users and who therefore were not that bothered about the quality of finishings and so on.

During this time, the brochures being flaunted were high-end, the property models being shown off at exhibitions were high end, the sales offices were high-end — but that was where it stopped. When many of those developments were completed (I’m thinking Dubai Marina primarily) few ended up being genuinely high-end products. The goal was to make money, period — and we all know how that scenario turned out.

So in 2013, we should welcome the fact that developers are selling truly luxurious quality homes — it is a sign that they are building for genuine city dwellers.

However, the only scary part is that some developers are still allowing investors to take possession of a unit with just a ten per cent down payment and then allowing them to flip it twenty-four hours later. We’ve already seen this with some projects launched at the beginning of this year and it is cause for concern as we don’t want to feel we are slipping back to selling to speculators, which is what any new laws need to prevent from happening.

Moving away from this negative point though, it is good to now see that developers are allowing end users to customise their homes a lot more than in past years when you couldn’t even move a wall without getting into a heap of trouble. It is now much less a market driven by the developer, instead the buyer has more say and their interests really matter.

The UAE property market is coming back with a bang, but thankfully into a world that is a different place — one that has more respect for people who are genuine, serious cash buyers. In the long run, I this will benefit us all.

The writer is CEO and founder of Views expressed by the author are his own and do not reflect the newspaper’s policy

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