Being the Gulf region`s most prominent exposition for the real-estate industry, Cityscape Global tends to provide some valuable insights into the property market`s pulse, overall health and direction; to this extent, the 16th. edition of Cityscape was no surprise.
As per the organisers, visitors to the flagship exhibition were
up 25% from the previous year, indicating revived interest in the trade fair and the exhibitors` products.
3-2-1 – Launch
Following the quieter summer months, Cityscape traditionally is the platform for property developers to launch new offerings and cash in on the buyers` appetite – if present.
Abu Dhabi`s developer Aldar Properties was able to sell out two mid-market buildings with a combined price tag of 400m AED in the course of three days at the exhibition, Dubai-based developer Azizi developments was able to sell off Phase 1 of its Azizi Riviera undertaking as well as 50% of Phase 2.
On Tuesday, the emirate`s evolving district „Dubai South“ saw the announcement of a 7bn AED investment into residential, commercial and mixed-use buildings situated within the lighthouse master development next to Al Maktoum airport and the
Expo 2020 site. As per official statements, 50% of the investment is to be shouldered by the master developer while the other half will be offered to private investors.
Chinese Ties
Particularly noteworthy was the inking of an MoU between Union Properties and China State Construction Engineering Corporation (CSCEC), envisaging the Chinese counterpart to construct and (partly) fund the 2.2bn AED re-development and extension of Dubai`s Motor City project.
In a further move to funnel Chinese investment into Dubai`s market, the Dubai Land Department (DLD) has signed an agreement with UC Forward in the joint endeavour to strengthen ties with Chinese property companies and investors, inter alia offering dedicated services like native language advice to Chinese prospects.
Affordable Takes Centre Stage
On the back of a demand shift from luxury to affordable for the lion`s part of the audience, developers have clearly adapted their offering schemes to accommodate for lower-priced, smaller units and attractive payment plans, frequently spiced-up with some special offers (i.e. 2% DLD waiver), valid for the duration of Cityscape.
Architectural extravaganza and the „faster, higher, further“ approach so typical for Dubai`s earlier days have clearly given way to commercial reason, usability and certainty.
Nowadays, the focus is on the end-user looking to move into their new property in two to three years. Typical propositions to this clientele include payments as low as 40 percent until and including handover (typically in two to three years) with the remainder to be paid in instalments up to ten years after completion.
For most buyers, such proposals do away with the need to utilise bank finance solutions, thereby further reducing the total cost of ownership.
Therefore, affordable housing is still on the rise, and rightly so, considering that Dubai`s middle class is growing substantially faster than the top-end. Moreover, oil prices resisting to rise substantially and a general sluggishness in the regional economy induce many of the (previously) higher-income earners to shop for cheaper housing options, too.
Summary
There clearly is a growing interest in Dubai property, indicated by more visitors and surprisingly robust sales figures on the ground. Without any doubt, this progress is partly based on the market participants` assumption that the market is about to enter into its next cycle, moving on and towards 2020.
Exceedingly fancy and „bling“ projects are becoming more of a side note, indicating a market which has further matured and in which tried and tested developers – honouring project timelines and their quality assurances – are increasingly rewarded by the buyer audience.
In my opinion, reaching out to China will unleash substantial demand levels for Dubai`s property market in the years to come. Moreover, this strategy is likely to develop synergies with and momentum from similar efforts to tap into China`s growing tourism market.
The author advises institutional investors about property transactions and handles property portfolios in Dubai since the year 2007. Should you have comments or inquiries, please contact the author on
