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Dubai’s Expo 2020 spurs real estate growth as real estate companies report record sales.

The upsurge in Dubai’s real estate market seems to be coming, as the years of policy reforms by the kingdom finally seems to be bringing back investors’ confidence in the sector. Long-term visas for investors and professionals, favorable payment plans and increased flexibility in debt repayment by financial institutions are some of the initiatives that have changed this mood.

“Investors’ confidence has been very high since the announcement that Dubai would host the expo in October,” says Atif Rahman, Partner & Director, Danube Properties. Rahman, this year, has special reason to feel elated because Danube Properties recently delivered a massive AED 300 million luxury residential community project.

“The good news is that we have already delivered this project and the bad news is that we are 100% sold out,” quips Rahman, who believes that delivery of a project is actually the real report card for any builder.

That apart, the last quarter of 2019 had recorded close to 5,000 real estate transactions, the highest number of property sales since 2008, and Dubai’s residential stock that is projected to reach 6,37,000 this year.

Expo 2020 – which the government calls “the largest event ever staged in the Arab world will host 190 countries, and millions of visitors from across the globe. The Expo will stretch for 173 days with several themes ranging from promoting innovation and sustainability in the Arab region.

Rahman thinks that Expo in the past has changed the economy of countries that have hosted such events, “You will see a dramatic growth in local economy and rise in real estate prices. That is the power of Expo,” he says.

Dubai, is betting billions of dollars in its efforts to showcase the Expo as the world’s biggest event ever. The organizers expect 11 million visits by people living in the UAE and 14 million from overseas visitors. A recently published economic impact assessment by consultancy firm EY noted that the Expo is expected to provide an AED 122.6 billion boost to the local economy, besides creating 49,700 full-time jobs a year.

Rahman is confident that the expo will spur further development of Dubai and encourage business.

The investment in Expo and the government spending in the infrastructure around it is one key factor that has been keeping the Dubai economy on track in the recent quarters – a view further endorsed by London-based Capital Economics which predicts that helped by the Expo, Dubai’s economic growth should range between 3.8% and 4.5% over the next few years.

Expo 2020 is expected to create a large number of job opportunities across various sectors including service industries, architecture, infrastructure development and engineering, travels and tourism sectors.

There is no doubt that Dubai’s real estate sector buoyed by the expo is on an upswing now. Developers like Rahman are expecting that post Expo, investors would like to have their base in the country, as he believes the regulatory and infrastructure that it provides is as attractive as any other global city like New York, London or Paris.

Despite the local Emiratis and emergence of Chinese as the leading investors in real estate in the region, real estate developers feel Indians have started looking at Dubai for their real estate investments. Considering the soaring real estate prices back home, the luxury factor has added to Indians interest in Dubai property.
The average price of residential properties in Dubai is in the range of AED 1,000 to 12,000 per sq ft which translates to Rs 20,000 to 24,000.

Rahman says it is the right time to invest in Dubai property market because it is not just about the conventional buying and selling. When you look at the average returns that you are able to clock anywhere else in the world it is still struggling between 5% and 6%. “Sometimes in a very glamorous situation it will be about 7% to 8%. But, in Dubai I can confidently say it is easy to make 10% to 12% all day long,” says Rahman.

Moving to Dubai has been a very enticing dream for many Indians – a luxurious lifestyle, the temptation of living tax-free, plentiful malls and beaches, several high-end shopping complexes, and a bustling employment market are some of the many advantages that the middle eastern city offers. If you’re someone looking to move to Dubai and probably considered buying a home there, here’s a piece of amazing news – realty giants. Danube Properties has just completed 454 units and pre-completion of 426 residences in Glamz – its fifth and sixth residential projects in record time!

The celebration was marked by a glittering ceremony with a series of laser shows and fireworks lighting up the sky. The fifth and sixth residential projects by the brand were launched and sold out in 2016 and reflect the developer’s strong commitment to customers. Once the planned hand-over of 880 units in Starz and Glamz are completed, Danube Properties will have delivered 1,711 residential units, worth Dh1.69 billion, part of its portfolio of 5,019 residences, worth Dh3.82 billion, in less than five years after it launched its maiden project – Dreamz in June 2014.

Homes with state-of-the-art facilities

Built with the latest green and sustainable building technologies, the smart homes within both the projects are fitted with the latest state-of-the-art facilities and amenities including built-in wardrobes, the latest modular home furnishings with upgraded materials used during the construction phase – more advanced than those promised during the launch of the projects.

The 880 homes come with the best-in-class lifestyle amenities, including fully-fitted gymnasium, health club, swimming pool, large reception area, community areas with landscaped greenery, ample car parking and other facilities – all offered at a very affordable price and with one percent monthly payment plan. In picture: Starz & Glamz projects by Danube Properties at the completion celebration

Accessibility like no other Once handed over, the residents will also enjoy easy access to Dubai’s public transport with a metro station within 2-minutes of walking distance from Glamz and three minutes from Starz. Residents will be able to reach the Expo 2020 site in just 7-10 minutes through metro and catch a flight at Al Maktoum International Airport – which can be reached in 15 minutes from the nearest metro station.

“As we move closer to the Expo 2020, we see renewed confidence in the UAE real estate market. The complete sell-out of our projects reflects strong investor confidence in not only the Dubai real estate market but also in Danube Properties,” says Rizwan Sajan, Founder and Chairman of Danube Group. “Today we are not only delivering homes but delivering promises we made to home buyers who have put their faith in us,” he adds.

A sturdy market leader
Danube Properties’ new home deliveries come at the backdrop of its stellar performance in 2018 – its best year so far – when a whopping 78.5 percent jump in sales of the number of residential units has boosted Danube Properties’ market share of off-plan sales to 10.6 percent in 2018, compared to the 5 percent in 2017. In picture: The Chairman of Danube Mr. Rizwan Sajan and Mr. Atif Rahman – Director & Partner at Danube Properties, along with Masdar Official, Mr. Fahem Al Tamimi.

The company last year sold a total of 1,869 residential units, according to its annual report. Among the total number of properties sold by Danube Properties, 89 were ready-to-move-in while the rest 1,780 units were off-plan properties. The sales price of 1,869 units increased by 19.26 percent to Dh978 million last year, compared to the sales price of 1,047 units worth Dh820 million in 2017, the report shows.

Atif Rahman, Director and Partner of Danube Properties, says, “A developer’s strength of character and commitment reflects on the quality of construction and the number of project deliveries. Our record of continuous development and timely delivery of properties speaks volumes about our strong commitment to quality, timely delivery and our solid commitment to our home buyers.

“With the launch of Starz in 2016, we pioneered in introducing specially designed modular furniture. This will help the residents maximise the use of available space by converting the living room into a bedroom at night. We remain committed to delivering happy communities with phenomenal value addition. I am confident, buyers of properties in Starz and Glamz will be extremely delighted with the quality of finishing and timely delivery,” Atif Rahman concludes.

Recommended By Colombia In picture: Mr. Rizwan Sajan – Chairman at Danube – and Mr. Atif Rahman, Director & Partner at Danube Properties, along with VIP officials from Dubai Land Department, Masdar, and dignitaries. Danube Properties has so far awarded Dh1.6 billion worth of construction contracts involving 10 of the 12 projects launched so far. In 2018, Danube completed construction of 358 residential units while it awarded construction contracts for 926 units. Disclaimer: This article has been produced on behalf of Danube Properties by Times Internet’s Spotlight team.

Link: https://timesofindia.indiatimes.com/spotlight/heres-why-you-could-be-a-step-closer-to-your-dream-of-owning-a-home-in-dubai/articleshow/69446056.cms

Real estate market is witnessing green shoots, with senior Dubai Land Department officials signalling increased transactions year-on-year in the first two months of 2019

By Waheed Abbas, Khaleej Times

UAE – Led by Burj Khalifa developer, Emaar, several big players continued to dominate the sales of new properties in Dubai’s oversupplied market in early 2019, new data revealed.Dubai Hills Estate, Nakheel, Meraas, Damac Properties, Dubai Holding, Seven Tides International, Azizi Developments, and Danube Properties were the other major developers, who registered positive residential sales in the first two months of this year, according to Property Finder, an online real estate marketplace.Emaar Properties sold 1,374 homes in the first two months of 2019, accounting for 24 per cent of the total share, while Dubai Hills Estate sold 601 units, contributing 10 per cent to the total sales. The Palm developer, Nakheel, sold 359 homes, accounting for six per cent of the total market share.As reported previously by Khaleej Times, the emirate’s real estate market is witnessing green shoots, with senior Dubai Land Department officials signalling increased transactions year-on-year in the first two months of 2019. Property Finder’s results revealed that Emaar led in terms of sales value with Dh3.56 billion followed by Dh1.078 billion by Dubai Hills Estate and Dh66 million by Dubai Holding.

“In Dubai last year, we saw a number of long-time renters who converted to homeowners, in part due to attractive prices and payment plans in newly handed over projects. The combined effect is a healthy trend where off-plan investors are profiting from affordable housing and the number of homeowners are also increasing,” said Lynnette Abad, director of Data and Research at Property Finder.

In terms off-plan sales during January-February 2019, Emaar sold 1,043 off-plan homes, commanding 34 per cent market share while Dubai Hills Estate sold 539 homes, accounting for 18 per cent, and Dubai Holding clinched 163 off-plan sales, contributing five per cent of the share.

Emaar’s off-plan sales totalled Dh2.45 billion while Dubai Hills Estate and Dubai Holding came second and third with Dh688,200 and Dh308,242 sales, respectively.

In another development Danube Properties on Wednesday released its 2018 results, recording a whopping 78.5 per cent jump in residential units, increasing its share of off-plan sales to 10.6 per cent in 2018 from five per cent in the previous year.

Last year, Danube sold 1,869 residential units for Dh978 million while 1,047 properties worth Dh820 million were sold in the previous year as prices are substantially lower than the peak witnessed in 2014. Global ratings agency S&P had said that property prices in Dubai have fallen 25 per cent to 33 per cent in nominal terms since 2014.

Atif Rahman, director and partner of Danube Properties, said the market is the best regulated real estate market not just in the region, but globally and it is an amazing time to do business.

“Danube Properties‘ stellar performance reflects our firm belief in the affordable housing market. Despite challenging market conditions, we have recorded 78.5 percent growth in volumes and 19.27 percent growth in the sales transaction value,” he said.

Most areas in Dubai have seen modest declines in sale prices in Q1 2019 of under six per cent with the exception of Business Bay and Jumeirah Beach Residence (JBR).

Apartment sales in Business Bay recorded the highest decline in prices in the first quarter of 2019, while prices for the same in JBR have declined by 6.7 per cent, revealed Bayut data released on Wednesday.

For villa sales, Damac Hills saw the biggest decline as prices for 4-bedroom units fell 9.7 per cent with prices falling from Dh2.88 million to Dh2.6 million. This could be attributed to the handover of more units, creating a larger portfolio of units with smaller square footage than what was available in Q4 of 2018. ? ?

Bayut data revealed that Dubai Marina was the most popular area for apartment sales as the upscale apartments in the area offer 6.4 per cent an average rate-of-return. While Arabian Ranches took the top spot for villa sales with a 5.8 per cent RoI. But the sub-community of Al Reem is predictably the most popular with potential investors, Bayut said.

However, affordable communities such as International City and Dubai Sports City have witnessed an uptick in prices for 2-bedroom units.

Prices for these units in International City have risen from Dh690k to Dh700k, while in Dubai Sports City, prices have jumped from Dh875k to Dh900k. Interestingly, both areas also boast the highest RoI in Q1 2019 for apartments. The average ROI in International City stands at an impressive 9.7 per cent while Dubai Sports City’s apartments deliver an ROI of 7.9 per cent.

Copyright © 2019 Khaleej Times. All Rights Reserved.

Dubai’s property market is witnessing signs of green shoots as the number of transactions increased in the first two month of 2019 while developers also report good numbers as lower prices attract new buyers despite oversupply in the market.

“In the first two months of 2019, there is increase in number of transactions. There are more buyers in the market. The government’s initiatives like 100 per cent foreign ownership and 10-year visa are the privilege that the investors are looking for. We are targeting new markets like Africa, the US and Canada to enhance foreign investments into Dubai,” said Majida Ali Rashid, assistant director-general of Dubai Land Department (DLD).

“Dubai’s property, real estate infrastructure as well as investors are pretty matured now,” she said on the sidelines of the first day of the 3-day International Property Show, which began at the Dubai International and Exhibition Centre on Tuesday.

In the first 11 months of 2018, the total value of transactions reached Dh194 billion while Investors pumped in Dh62 billion investments during January to November 2018.

Atif Rahman, director and partner of Danube Properties, sees current inventories will be absorbed by the market by winter when demand will pick up and there might not be enough supplies left for buyers. “That’s why, it is the right time to buy for end-users, who can get the best from bargain.

He noted that Dubai’s real estate market will continue to attract investment, regardless of the demand-supply situation and how it changes based on the market conditions. “Right now, off-plan sales might grow at a slow pace and sale of ready-to-move-in homes might be an attractive proposition, depending on how the developers attract the home buyers.”

According to Property Finder, off-plan properties accounted for 55 per cent of Dubai market transactions in the first 2 months of 2019 while secondary market deals made up the remaining 45 per cent of the share. This is a far cry from the earlier cycles in the Dubai property market when off-plan sales dominated and secondary home transactions trailed by a huge margin. This unusual balance suggests that Dubai is no longer a purely investor-driven market.

In terms of volume, 3,069 off-plan homes exchanged hands while 2,463 secondary market deals were clinched in January and February 2019.

“Robust activity in the secondary market denotes that end-users are still active and purchasing homes in Dubai. When compared to the first two months of 2018, off-plan property transactions have declined by 7.8 per cent this year,” according to Property Finder research.

“Prices in the secondary market continue to be more attractive and affordable, while sellers have been much more motivated, one reason due to their competition with off-plan, ready stock,” said Lynnette Abad, director of research and data at Property Finder. Secondary market transactions in January and February 2019 are down only by a marginal 1.4 per cent in a year-on-year comparison, it added.

For apartments, the Palm Jumeirah, Dubai Marina and International City accounted for the most secondary market transactions in the first two months; while Dubai Hills Estate, Downtown Dubai and Dubai Creek Harbour (The Lagoons) took the lion’s share of off-plan deals.

Farhad Azizi, CEO, Azizi Developments, also echoed Majida’s views, saying there is an uptick since December 2018 and the first quarter of 2019 have been better than the same quarter last year.

“The first quarter of 2019 is much better than 2018; things had started to improve from December 2018, not just for us, but for other developers as well. Momentum is picking up and there is a lot of excitement ahead of Expo 2020 Dubai. I believe it is good time to buy because prices are low,” he said.

“The good thing is that new demand is coming from new buyers. Majority of them are end-user and non-residents from China, GCC, Africa, India and Pakistan.”

Azizi pointed out that some developers are also giving business licence on buying a new home as an added incentives to new buyers coming to this market. “We like those things so we have done it as well. Dubai has that ‘wow’ effect and when the ‘wow’ effect is there the trend will pick up. I still think that it is a good time to buy.”

Taimur Khan, research manager, Knight Frank, also acknowledged that demand is there provided the developer is building the right product.

He noted that Dubai’s real estate market will take a couple of years before it gets past the supply glut.

“People are looking at Dubai as a long-term play. A lot of residents are thinking that it is a time to go for a property buy. If you’re here longer than 2 years and 3 months, it makes a lot of sense to buy property with the kind of payment plans being offered in the market,” he added.

Outlook

Azizi predicted that the price of an apartment that now costs Dh1 million will increase to about Dh1.1 million by December 2019. “Prices will be 10 per cent more expensive, provided it is a good location project.”

Going forward, Azizi believes that those properties that are closer to Sheikh Zayed Road such as Downtown, Dubai Marina, JBR etc. will continue to witness good demand in the next 5 to 10 years.

Taimur Khan of Knight Frank sees Downtown extension, DIFC 2.0, Business Bay and Jumeirah an interesting developments that will perform well in the next five to 10 years.

“If developers can rightfully match demand with the supply, then there is no reason why we can’t see prices rising at slow but stable rate in the coming years. In 10-years, if we can get CAGR of 3-4 per cent, we would be happy,” he added.

Dubai’s property market is witnessing signs of green shoots as the number of transactions increased in the first two month of 2019 while developers also report good numbers as lower prices attract new buyers despite oversupply in the market.

“In the first two months of 2019, there is increase in number of transactions. There are more buyers in the market. The government’s initiatives like 100 per cent foreign ownership and 10-year visa are the privilege that the investors are looking for. We are targeting new markets like Africa, the US and Canada to enhance foreign investments into Dubai,” said Majida Ali Rashid, assistant director-general of Dubai Land Department(DLD).

“Dubai’s property, real estate infrastructure as well as investors are pretty matured now,” she said on the sidelines of the first day of the 3-day International Property Show, which began at the Dubai International and Exhibition Centre on Tuesday.

In the first 11 months of 2018, the total value of transactions reached Dh194 billion while Investors pumped in Dh62 billion investments during January to November 2018.

Farhad Azizi, CEO, Azizi Developments, also echoed Majida’s views, saying there is an uptick since December 2018 and the first quarter of 2019 have been better than the same quarter last year.

“The first quarter of 2019 is much better than 2018; things had started to improve from December 2018, not just for us, but for other developers as well. Momentum is picking up and there is a lot of excitement ahead of Expo 2020 Dubai. I believe it is good time to buy because prices are low,” he said.

“The good thing is that new demand is coming from new buyers. Majority of them are end-user and non-residents from China, GCC, Africa, India and Pakistan.”

Azizi pointed out that some developers are also giving business licence on buying a new home as an added incentives to new buyers coming to this market. “We like those things so we have done it as well. Dubai has that ‘wow’ effect and when the ‘wow’ effect is there the trend will pick up. I still think that it is a good time to buy.”

Taimur Khan, research manager, Knight Frank, also acknowledged that demand is there provided the developer is building the right product.

He noted that Dubai’s real estate market will take a couple of years before it gets past the supply glut.

“People are looking at Dubai as a long-term play. A lot of residents are thinking that it is a time to go for a property buy. If you’re here longer than 2 years and 3 months, it makes a lot of sense to buy property with the kind of payment plans being offered in the market,” he added.

Atif Rahman, director and partner of Danube Properties, sees current inventories will be absorbed by the market by winter when demand will pick up and there might not be enough supplies left for buyers. “That’s why, it is the right time to buy for end-users, who can get the best from bargain.”

He noted that Dubai’s real estate market will continue to attract investment, regardless of the demand-supply situation and how it changes based on the market conditions. “Right now, off-plan sales might grow at a slow pace and sale of ready-to-move-in homes might be an attractive proposition, depending on how the developers attract the home buyers.”

According to Property Finder, off-plan properties accounted for 55 per cent of Dubai market transactions in the first 2 months of 2019 while secondary market deals made up the remaining 45 per cent of the share. This is a far cry from the earlier cycles in the Dubai property market when off-plan sales dominated and secondary home transactions trailed by a huge margin. This unusual balance suggests that Dubai is no longer a purely investor-driven market.

In terms of volume, 3,069 off-plan homes exchanged hands while 2,463 secondary market deals were clinched in January and February 2019.

“Robust activity in the secondary market denotes that end-users are still active and purchasing homes in Dubai. When compared to the first two months of 2018, off-plan property transactions have declined by 7.8 per cent this year,” according to Property Finder research.

“Prices in the secondary market continue to be more attractive and affordable, while sellers have been much more motivated, one reason due to their competition with off-plan, ready stock,” said Lynnette Abad, director of research and data at Property Finder. Secondary market transactions in January and February 2019 are down only by a marginal 1.4 per cent in a year-on-year comparison, it added.

For apartments, the Palm Jumeirah, Dubai Marina and International City accounted for the most secondary market transactions in the first two months; while Dubai Hills Estate, Downtown Dubai and Dubai Creek Harbour (The Lagoons) took the lion’s share of off-plan deals.

Outlook

Azizi predicted that the price of an apartment that now costs Dh1 million will increase to about Dh1.1 million by December 2019. “Prices will be 10 per cent more expensive, provided it is a good location project.”

Going forward, Azizi believes that those properties that are closer to Sheikh Zayed Road such as Downtown, Dubai Marina, JBR etc. will continue to witness good demand in the next 5 to 10 years.

Taimur Khan of Knight Frank sees Downtown extension, DIFC 2.0, Business Bay and Jumeirah an interesting developments that will perform well in the next five to 10 years.

“If developers can rightfully match demand with the supply, then there is no reason why we can’t see prices rising at slow but stable rate in the coming years. In 10-years, if we can get CAGR of 3-4 per cent, we would be happy,” he added.

 

Copyright © 2019 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Dubai’s property market is witnessing signs of green shoots as the number of transactions increased in the first two month of 2019 while developers also report good numbers as lower prices attract new buyers despite oversupply in the market.

“In the first two months of 2019, there is increase in the number of transactions. There are more buyers in the market. The government’s initiatives like 100 per cent foreign ownership and 10-year visa are the privilege that the investors are looking for. We are targeting new markets like Africa, the US and Canada to enhance foreign investments into Dubai,” said Majida Ali Rashid, assistant director-general of Dubai Land Department (DLD).

“Dubai’s property, real estate infrastructure as well as investors are pretty matured now,” she said on the sidelines of the first day of the 3-day International Property Show, which began at the Dubai International and Exhibition Centre on Tuesday.

In the first 11 months of 2018, the total value of transactions reached Dh194 billion while Investors pumped in Dh62 billion investments during January to November 2018.

Farhad Azizi, CEO, Azizi Developments, also echoed Majida’s views, saying there is an uptick since December 2018 and the first quarter of 2019 have been better than the same quarter last year.

“The first quarter of 2019 is much better than 2018; things had started to improve from December 2018, not just for us, but for other developers as well. Momentum is picking up and there is a lot of excitement ahead of Expo 2020 Dubai. I believe it is good time to buy because prices are low,” he said.

“The good thing is that new demand is coming from new buyers. Majority of them are end-user and non-residents from China, GCC, Africa, India and Pakistan.”

Azizi pointed out that some developers are also giving business licence on buying a new home as an added incentives to new buyers coming to this market. “We like those things so we have done it as well. Dubai has that ‘wow’ effect and when the ‘wow’ effect is there the trend will pick up. I still think that it is a good time to buy.”

Taimur Khan, research manager, Knight Frank, also acknowledged that demand is there provided the developer is building the right product.

He noted that Dubai’s real estate market will take a couple of years before it gets past the supply glut.

“People are looking at Dubai as a long-term play. A lot of residents are thinking that it is a time to go for a property buy. If you’re here longer than 2 years and 3 months, it makes a lot of sense to buy property with the kind of payment plans being offered in the market,” he added.

Atif Rahman, director and partner of Danube Properties, sees current inventories will be absorbed by the market by winter when demand will pick up and there might not be enough supplies left for buyers. “That’s why, it is the right time to buy for end-users, who can get the best from bargain.”

He noted that Dubai’s real estate market will continue to attract investment, regardless of the demand-supply situation and how it changes based on the market conditions. “Right now, off-plan sales might grow at a slow pace and sale of ready-to-move-in homes might be an attractive proposition, depending on how the developers attract the home buyers.”

According to Property Finder, off-plan properties accounted for 55 per cent of Dubai market transactions in the first 2 months of 2019 while secondary market deals made up the remaining 45 per cent of the share. This is a far cry from the earlier cycles in the Dubai property market when off-plan sales dominated and secondary home transactions trailed by a huge margin. This unusual balance suggests that Dubai is no longer a purely investor-driven market.

In terms of volume, 3,069 off-plan homes exchanged hands while 2,463 secondary market deals were clinched in January and February 2019.

“Robust activity in the secondary market denotes that end-users are still active and purchasing homes in Dubai. When compared to the first two months of 2018, off-plan property transactions have declined by 7.8 per cent this year,” according to Property Finder research.

“Prices in the secondary market continue to be more attractive and affordable, while sellers have been much more motivated, one reason due to their competition with off-plan, ready stock,” said Lynnette Abad, director of research and data at Property Finder. Secondary market transactions in January and February 2019 are down only by a marginal 1.4 per cent in a year-on-year comparison, it added.

For apartments, the Palm Jumeirah, Dubai Marina and International City accounted for the most secondary market transactions in the first two months; while Dubai Hills Estate, Downtown Dubai and Dubai Creek Harbour (The Lagoons) took the lion’s share of off-plan deals.

Outlook

Azizi predicted that the price of an apartment that now costs Dh1 million will increase to about Dh1.1 million by December 2019. “Prices will be 10 per cent more expensive, provided it is a good location project.”

Going forward, Azizi believes that those properties that are closer to Sheikh Zayed Road such as Downtown, Dubai Marina, JBR etc. will continue to witness good demand in the next 5 to 10 years.

Taimur Khan of Knight Frank sees Downtown extension, DIFC 2.0, Business Bay and Jumeirah an interesting developments that will perform well in the next five to 10 years.

“If developers can rightfully match demand with the supply, then there is no reason why we can’t see prices rising at slow but stable rate in the coming years. In 10-years, if we can get CAGR of 3-4 per cent, we would be happy,” he added.

– waheedabbas@khaleejtimes.com

Developers fast completing residential projects ahead of Expo 2020 Dubai

Residents will be able to buy or rent properties on more flexible terms and conditions as record 41,000 residential units are expected to come online this year due to higher materialisation rate of projects ahead of Expo 2020.

The latest data issued by Property Finder Group indicates that the up-and-coming communities in Dubai are likely to see more homes completed this year while the established neighbourhoods will see only a few additions to their inventory.

The real estate portal said 30 per cent of the 41,000 residential units under construction in Dubai this year are 96 per cent to 99 per cent complete with Jumeirah Village Circle is expected to deliver 3,400 homes, the highest in Dubai.

Lynnette Abad, director of Research and Data at Property Finder, said this is an excellent time for those who are looking to purchase property.

“Considering more than 70 per cent of expats rent, this new supply is very much welcomed as residents are benefiting by upgrading the community in which they reside. As the Dubai property market matures, residents are finally seeing rents reduced to a level that is considered affordable and, in turn, their cost of living is going down,” she added.

Shaher Mousli, chairman and CEO of Arthur Mackenzy Properties Group, said 2018 was a slow year in comparison to 2017 and 2016, which caused some projects to slow down. However, last year, there was an influx of investors who came in and pumped money into these projects that were offered to them at good price points by owners and landlords.

“Usually, opportunities arise for investors when there is a slowdown in the market. During a crunch time Dubai has always presented lucrative opportunities to external investors which enables project completion,” he said.

“I believe that a main reason for many projects heading towards completion now is to meet the expected demand during Expo 2020,” Mousl told Khaleej Times.

Over 28,000 homes were handed over in Dubai in 2018, which has been more than the number of units handed over in the past few years, according to Property Finder report.

“I believe Dubai’s real estate market has been extremely resilient in a cloudy weather and continues to remain one of the highest yielding internationally. There are several projects anticipated to complete this year, which in turn will offer the consumer a wider choice in location, price and quality,” said Atif Rahman, director and partner of Danube Properties.

Due to the delivery of these projects, he said a bit of pressure will be felt, but should not be considered a sign for worry. Like it has happened historically in every global market, it will even out over a period of time with the increase in demand through growth in population, he said.

“I expect the demand to catch up from Q3, which shall create the upward momentum for sale price and rentals. It’s a great time for end users and investors to take advantage and be ready to reap the results,” he said.

Higher materialisation rate

Although, over 41,000 homes are scheduled to be completed in Dubai in 2019, there is usually a considerable gap in what is announced and what enters the market. Actual deliveries have been 30 per cent to 50 per cent lower than developer projections. This is because developers usually adjust supply to match actual demand, the report said.

Referring to JLL report, Abad said traditionally materialisation rate has been 40 per cent to 50 per cent. “Supply hit a peak in 2018, however that doesn’t mean the materialisation rate changed due to the number of projects under construction and new project launches,” Abad said.

As of February 2019, the 41,000 units slated for completion in Dubai, 30 per cent are 96 per cent to 99 per cent ready, according to Property Finder. Moreover, 32 per cent of under-construction projects are 91 per cent to 95 per cent complete while 29 per cent of projects being built are 85 per cent to 90 per cent complete. This may result in a higher materialisation rate of projects this year, the report said.

“One of the key reasons behind higher materialisation rate of projects is partly due to the Expo 2020 factor, as most of the projects were planned to support the growth, which is expected from the Expo,” Rahman of Danube Properties said.

He attributed the credit to strong regulatory environment that ensures healthy project delivery and high investor confidence. “The support and control from the regulators has made every Property developers more responsible towards their obligations to complete projects on time.”

Referring to Core latest report on Dubai property market, its head of Research and Advisory Prathyusha Gurrapu said majority of the deliveries are in the affordable to mid-market segment, with Dubailand and Jumeirah Village Circle and Triangle accounting for one-third of all handovers.

“Although the pace of price softening has relatively slowed, we expect a lag in sales and rental price recovery as existing vacant stock and future supply over the next couple of years is expected to outpace steady demand,” he said.

He said many of these developments were planned during the 2014-15 peak.

“We also foresee developers aligning deliveries in the run up to Expo 2020. We have seen handovers increase over the last year, with over 21,700 units delivered in 2018 and expect a higher number of deliveries over 2019 and 2020, despite taking into account conservative realisation rates,” he said.

A good start

A total of 4,441 residential units have been completed in Dubai in the first two months of 2019, of which 4,184 were apartments and 257 were villas and townhouses, according to Property Finder research.

Jumeirah Village Circle will see the highest number of homes completed this year (3,408) and accounts for 8.19 per cent of the upcoming supply in 2019. Business Bay is next up, with 3,152 homes slated for completion in 2019 and accounting for 7.57 per cent of the supply. Third is Dubai Sports City with 3,098 homes to be ready in 2019 and contributing to 7.44 per cent of total supply.

In the areas where new supply will be released, sales and rental prices will continue to adjust based on market demand,” Abad said.

“Over the last year, this has given opportunity to a new market trend where we have seen a significant amount of renters converting into home owners and we believe 2019 will be the year for end-users,” she said.

“For those continuing to rent, we will continue to see the trend where many will upgrade to bigger units or move to more desirable areas with sought after amenities in addition to retaining negotiating power. Both of these trends have increased the amount of disposable income which contributes to the overall economy,” she explained.

New developments such as Mohammed Bin Rashid City, Al Furjan and Town Square will each add over 2,000 homes to Dubai’s residential market this year. Other new projects like Akoya Oxygen, Mirdif Hills, Dubai South and Damac Hills will each add over 1,000 units to Dubai’s residential market across 2019.

Established communities such as International City (512), the Palm Jumeirah (289), Dubai Motor City (276), Dubailand (188) and Jumeirah Golf Estates (95) will only contribute a small portion of the supply pie in 2019.

Bucking this trend are communities such as Downtown Dubai (1,772) and Dubai Marina (944), where considerable construction activity is still on and therefore will see more home completions.

To a question about affordable share in estimated 41,000 units to be completed this year, she said: “If we look at the areas where majority of the supply will be completed, we can expect to see affordable stock in quite a few areas including JVC, Sports City, DSO, Dubailand, Arjan and Dubai South which account for about 33 per cnet of the 41,000 to be completed.”

UAE, Saudi Arabia accounts for more than 66% of GCC construction activity

Construction activity in the UAE and GCC is projected to remain strong, thanks to a heavy pipeline of 27,000 planned projects worth $2.38 trillion (Dh8.734 trillion) across the Gulf region, according to industry analysts and executives.

Data by the BNC Projects Journal disclosed that the UAE and Saudi Arabia accounted for more than two-thirds – at $1.61 trillion (Dh5.9 trillion) – of total planned projects by 2018-end. Last year, around $77.6 billion (Dh284.8 billion) worth of contracts were awarded as compared to $88.8 billion (Dh325.9 billion) in the previous year, a drop of 13 per cent, across the region. As per the BNC Projects Journal, the decline is due to an exceptionally large number of projects that were seen in prior years were driven by Expo 2020 Dubai. Avin Gidwani, CEO, BNC Network, said increased earnings from high oil prices during the early part of 2018 supported the commitment for economic stimuli during the year and 2019 bumper budgets released by the UAE and Saudi Arabia confirm the continued commitment towards revitalising the region’s economy.

As per the January edition of the BNC Projects Journal, contract awards in the GCC in 2019 are expected to increase for utility, industrial and oil and gas projects but may continue to decline for urban construction.

“The increased spending is driven by the UAE and KSA’s bumper budgets, Adnoc’s 2030 Integrated Strategy and KSA’s Vision 2030,” Gidwani added.

The top 3 sectors with the most value of contract awarded in 2018 were residential and commercial ($24.1 billion), transport ($13.1 billion) and oil and gas in region. With projects worth $43 billion currently in tender, the utility sector is expected to outperform the other sectors in terms of project awards in 2019 while residential and commercial sector will remain in the top 3 – even with the decline.

UAE projects

There are currently over 15,000 projects in the UAE estimated at $791 billion, including an estimated $202.8 billion of projects in concept, design and tender stages, positioning the UAE with the second largest project pipeline after Saudi Arabia’s $827.4 billion pipeline.

According to the BNC Projects Journal, $38.9 billion worth of contracts were awarded in the UAE last year, a drop of 9 per cent compared to 2017.

“The UAE enters 2019 determined to kick the economy back into gear, with the announcement of it $16.3 billion budget which is 17.3 per cent larger than last year and the largest budget in the country’s history,” Gidwani added.

It said there are around 18 pavilion projects for Expo 2020 Dubai currently in the concept (7) design (9) and tender (2) phases that are expected to be awarded. These include pavilion projects for Austria, Poland, France, South Africa, India, Thailand, Spain, China, USA, Japan, UK, Nigeria, Oman, Brazil, Bahamas, Sweden and one Opportunity pavilion.

Atif Rahman, director and partner of Danube Properties, said outlook for the construction – particularly for the short term – is good as most contractors are busy finishing the existing contracts and projects.

“The real estate sector worldwide might sometime come under slight pressure in the short term, however in the long term you also make handsome gains. We believe, the market has the ability to absorb the growing supplies and in the next one year or two these properties will be absorbed with growth in demand prior to the Expo 2020,” Rahman said.

But the long term outlook, according to Rahman, depends on the overall global economic growth, oil price and new investment in infrastructure and job creation.

Sudhakar Rao, chairman of Gemini Group, said public utility and infrastructure projects will continue beyond Expo 2020. “So we don’t see any immediate crisis in the construction sector, except payment delays in some areas, which can be resolved with bank’s support.”

“New demand in construction projects will help the sector. The large developers and the public sector spending on housing and infrastructure could help the construction sector and the construction materials sector’s growth. Precast demand is on rise due to its efficiency in achieving faster construction,” Rao said.

Danube’s Atif Rahman said infrastructure, industries, housing and logistics will continue to drive growth of the construction in the UAE. Citing an example, he said Al Maktoum Airport, Union Railway and Hyperloop are some of the major infrastructure – in addition to regular real estate and hospitality projects – will drive the growth.

The Journal data showed that urban construction contributes 45 percent of planned and ongoing work in the GCC and is valued at $1.08 trillion. While GCC hospitality projects market is estimated at $144.6 billion, 13 per cent of all urban construction projects in the region. The value of planned and ongoing oil and gas projects grew by 11 per cent over the course of the year to $373 billion at the end of 2018, up from $334 billion in 2017.

While transport projects, according to BNC Journal, worth $300 billion are either planned or ongoing in the GCC region registering a 10 per cent year-on-year growth.

“With a strong pipeline of projects worth $156.8 billion, the transport sector is expected to witness large contract awards in the year ahead,” it added.

A construction site in Abu Dhabi. The new regulation enables the Central Bank to allow more property financing as needed. Analysts say this is crucial for the completion of projects that had been hounded by funding challenges.

When the UAE Central Bank removed a key hurdle that had long limited the ability of banks to fund real estate projects, it also made sure to remain flexible to counter risks of an overheating market. Announced in November, the regulation abolished a ceiling on banks’ exposure to real estate loans, which had been previously set at 20 percent of the total deposits of banks. A new limit has not been announced, but the matter is under discussion with the UAE Banks Federation.

This effectively means that the Central Bank can adjust the ceiling higher or lower based on the performance of the market.

“The cap amendment would act as a ventilator to the current real estate sector wherein we were witnessing cash flow constraint in the market,” says Dhiren Gupta, managing director of 4C Mortgage Consultancy. “The banks could now allocate larger reserves to finance real estate development for both at retail and corporate lending.”

Enhanced liquidity

As more cash pours into the market, Gupta believes the move will ease the stress in the property sector. “It’s been predicted that the loans will grow up to 5 percent in 2019, but it is judgmentally important to maintain current loans to value levels for mortgages,” he adds.

The lifting of the limit also acts as a catalyst to support infrastructural development in the UAE. “Under this new regulation, project finance could see as a major beneficiary, as earlier banks would restrict their lending appetite to finance such development,” says Gupta. “Also, the banks would be flexible in keeping the funding restriction set by the Central Bank. However, so far, it is not sure which loans will fall under the real estate finance.”

The regulation is also expected to uplift the confidence of real estate investors and end users in the UAE market. “The amendment indicates that the UAE Government is striving to maintain strong economic growth for the people of this country,” adds Gupta. “With this new regulation bank appetite to finance real estate development would growth, hence, the market could witness added mortgage transactions in the coming months.”

More aggressive participation

Amer Khan, head of retail products and segments at Standard Chartered UAE, says the amendment will help banks participate more aggressively in the real estate sector, particularly in key growth markets such as Dubai and Abu Dhabi. “It allows banks to prioritise the use of its deposits to fund real estate loans both to the property developers and customer mortgages,” says Khan. “Increased access to bank funding will ensure property developers can complete existing projects and fund new projects as well. This will give ample options for homebuyers and investors. Also, like property developers, individual homebuyers and investors would have access to more funds, which would also encourage them to purchase the property.”

With the 20 percent cap, if a bank’s total deposit is Dh100 billion, the amount the bank is allowed to lend as real estate loans should not exceed Dh20 billion. “If banks already reach this limit, any loan request coming from property developers or mortgage will not be granted,” explains Khan. “If there will be no cap, then the bank may opt to lend more than Dh20 billion to fund real estate loans. This means the real estate sector will have wider access to funds. We can expect completion of projects faster or continuation of projects that were halted due to lack of funds. Also, we can expect more new projects due to access to more funds.”

Sunil Gomes, CEO of Gemini Property Developers, believes the removal of the cap will also give a push to the affordable market segment. “It will stimulate investors, especially the middle-income investors to buy property as the confidence increases due to this new regulation,” says Gomes.

Atif Rahman, director and partner of Danube Properties, says the Central Bank’s move is well timed for the property market. “That will help the banks to support the property and construction sectors, which will now have access to greater liquidity. It is a very timely and significant decision that will help stimulate the real estate market in the UAE.”

It is one thing to somehow manage to meet the basic requirements and an entirely different thing to deliver what is actually promised. The difference is the fulfilment of your customers’ aspirations, and hence, your own. Buildings aren’t just buildings, they are a lot more than that. Those in the industry who understand this are able to make good on their promises while the others fall behind. The smallest things add up to make the most significant impact when it comes to constructing buildings. Modern, ergonomic designs need to look at factoring in everything.

On the one hand, low floor area ratios, plot coverage and setback limits need to be focused on. On the other hand, reduced end-user costs, higher convenience, practicality, energy efficiency and added values need to be incorporated as well. All these things come together to catalyse excellent economies of scale and end-user satisfaction alike. To achieve both these primary objectives simultaneously is what enables entities to not just deliver on their promises, but even surpass them often at times.

Efficiency is key

It majorly comes down to efficiency, be it the efficiency of the utilisation of space, or the efficiency of building materials used. It is imperative to understand here that cost efficiency and cost reduction are not the same things. Those focusing on cost reductions often end up falling short on the expectations they set. However, those wasting precious resources on unplanned executions that they think might work out end up in the same boat as well.

Efficiency refers to quality design, low maintenance costs, maximum utilisation of building materials and minimum wastage in any shape way or form, from the construction stage to the point of resale even, when the property has been inhabited for a few years already.

Efficiency lies in the smallest of things, that are most likely to be neglected. When a building is being built, and houses are being designed, for example, there are a lot of things that can be done during the design stage itself that can contribute to reducing maintenance costs and enhancing the quality of housing. The construction of naturally lit corridors and the use of sensor-controlled lighting in common areas, for example, will continue to save costs and energy throughout the life of the building, while making for a beautiful and modern place for customers to want to have a house in. The use of epoxy paint in stairwells in another small way of reducing the overall maintenance cost to customers as the time needed between re-paintings will increase with reduced damage.

Similarly, a number of substantial things can be done inside the house as well. The use of granite flooring and quartz kitchen platforms, for example, goes a long way in contributing to the convenience of the inhabitants because they’re easy to maintain as these surfaces stain less and this also reduces the cleaning cost.

Moreover, their water absorption is minimal and their nature more durable. There are many such areas where attention to detail in terms of quality and costing can really do wonders for the whole architecture itself.

Apt pricing is crucial

Creating an exceptional product or service is essential for it to succeed, but that can only happen if it is priced aptly. Appropriate pricing is the key to driving profitability because your prices are not supposed to make your offering appear unaffordable to your buyers. It should be able to empower your customers to make a positive purchase decision.

For you to add value to your offering, it is not necessary for you to incur towering expenses and pass them on to your customers. A smart strategy and attention to detail can actually enhance the quality of your offering manifold without increasing its price because affordable housing doesn’t have to lack imagination, and quality inputs don’t always cost a bomb.

It is crucial to understand that delivering what you promise is not just about meeting the customers’ needs; it is also about fulfilling their dreams. An offering that delivers on its promises is an offering that creates its own market.

The writer is director and partner of Danube Properties. Views expressed are his own and do not reflect the newspaper’s policy.