KHALEEJ TIMES, Thursday, Mar 12, 2020 | Rajab 17, 1441
Developers go slow with new launches, private sector leads
Emirates:
Private sector developers lead while government-backed firms are going slow in
terms of new project launches in Dubai, with increased focus on ongoing projects
and delivering them on time.
Year-to-date, three private developers - Danube Properties, Sobha Realty, and
Samana Developers - have publicly announced the launch of their projects worth
over Dh800 million in total value, while some are in the planning stages.
However, government-backed property giants - barring Emaar Properties - stay
silent, focusing mainly on the completion and deliveries of ongoing projects.
Overall, the slowdown in new launches reflects that the emirate's property
market is fast heading towards a demand-supply balance. The emirate had
established the Higher Committee for Real Estate Planning in November 2019 to
bring balance between supply and demand and the current market trend reflects
that the sector is heading in the right direction. The committee is monitoring
and limiting the government-related entities' supply in order to provide more
opportunities to private sector developers.
"Government developers have massively slowed down with new launches. However,
Emaar launched a few projects since the start of the year. Surely, there are no
new launches of mega projects or new master communities," said Firas Al Msaddi,
CEO of fam Properties.
Faraz Ahmed, research manager for Mena at JLL, said that there has been a
slowdown in projects being launched from around 18,000 units in 2018 to just
8,000 in 2019.
"The slowdown can be seen as a natural move due to subdued market conditions,
and in response to the Real Estate Planning Committee announced in Q3 2019,
which aims to introduce measures to improve the balance between supply and
demand. Developers are also responding to the need for lower levels of future
supply and have changed their focus towards their existing inventories. We can
expect lower levels of new launches until market starts improving and sales
activity picking up," said Ahmed.
Atif Rahman, director and partner of Danube Properties, said that the Dubai
Government is very proactive when it comes to controlling and regulating the
sector or creating a catalyst for the market.
"The time since the committee has been formed, the government is trying to
regularise the supply and at the same time, they've come up with many
initiatives to boost demand. All put together, price is slated to go higher.
Therefore, this is right time to buy because government initiative is helping to
regularise the supply," he said.
Danube Properties on Wednesday launched Dh400 million Olivz, a master-planned
cluster of buildings offering 741 residential units and a number of retail and
recreational facilities. Located in Al Warsan First, project will house 741
apartments. It offers studio from Dh299,000, one-bed apartment at Dh475,000 and
two-bed at Dh699,000. The project is scheduled to complete in early 2022.
With Olivz, Danube Properties development portfolio grows to 6,194 units, with a
combined development value exceeding Dh4.5 billion.
"The launch of Olivz reflects our growing confidence in Dubai's real estate
market, which never ceases to amaze investors. The launch is timed well to meet
the needs of the growing number of end-users who are now more confident to buy
their dream homes," said Rizwan Sajan, founder and chairman of Danube Group. "We
have seen demand picking up in the last few months as we sold out all our
previous projects - that necessitated the launch of Oilvz."
He said that the Dubai property prices will not stay at current level for long.
"Dubai is among the cheapest in the world but one of the best for
infrastructure. When compared to New York or London, prices here are cheaper by
4-5 times," Sajan said at the launch of the project.
According to the Global Property Guide, residential property prices in Dubai
fell 4.05 per cent in 2019, an improvement from decline of 8.22 per cent in
2018.
According to Knight Frank's latest data, Dubai is third most economical city for
prime property among the top 20 cities worldwide. Investors can buy 154.7 square
metres (sqm) of prime property for $1 million. This is compared to just 16.4 sqm
of prime property in Monaco, 21.3 sqm in Hong Kong, 30.4 sqm in London, 32.2 sqm
in New York, 35.5 sqm in Singapore, 44.6 sqm in Paris and 102.2 sqm in Mumbai.
On Wednesday, Sobha Realty also announced the launche of Creek Vistas Reservé
Tower in Sobha Hartland. Scheduled for handover in March 2023, the 33-storey
luxury tower features 330 one and two bedrooms apartment with prices starting
from Dh876,000 onwards.
Jyotsna Hegde, president of Sobha Realty, said Hartland has proven to be very
successful in drawing the strong interest of Emirati, Arab and international
buyers.
Hailing the Dubai Government for its pro-active approach towards real estate,
especially private developers, she said: "From policy announced to
implementation of policy, it takes so little time and it gives businesses a lot
of safety. We know what is said by the leadership will be implemented and
achieved.