TOTAL 53 DAYS FROM THE BEGINNING OF THE YEAR, DUBAI NEEDED TO REFUT THE SKEPTICIAN'S OPPOSITIONS, PREDICTING A LOCAL HOUSING MARKET SOME RECOVERY. OFFICIAL STATISTICS QUICKLY CONFIRMED: THE ACTIVITY OF INVESTORS AND BUYERS OF REAL ESTATE IN THE EMIRATE IN 2016 HAS NOT ONLY DECREASED, BUT ON THE OTHERWAY, BEATS NEW RECORDS. DUBAI LINE UP FOR APARTMENTS AND VILLAS IN DUBAI, AND THERE ARE GOOD REASONS FOR THIS. Posted by: Helena Kryukova
Housing affordability is the main catalyst for the market
A report from the Dubai Land Department in February showed that in just 53 days since the beginning of 2016, the total amount of real estate transactions concluded in the emirate amounted to US $ 18.6 billion. The official forecast from the head of the Sultan Butti Bin Mergen’s department looks even more optimistic: the total value of real estate transactions in Dubai for 2016 is expected to be at least US $ 81.6 billion, which will mean that this indicator has been growing significantly from year to year for several consecutive years.
Whatever the analysts say, both direct and indirect signs clearly indicate: Dubai is now experiencing the beginning of another round of rising real estate prices and the booming demand for housing. For 2013-2014, the picture of the lines of people who wanted to buy a house in Dubai was quite familiar, and it seems that history is repeating itself again, only this time under the watchful supervision of regulatory authorities, which excludes all sorts of speculative distortions.
What makes investors line up for apartments in Dubai? The answer to this question can be given by the affordable housing sector, which has every chance of breaking out among the market segments in terms of demand. In 2015, the share of those who can afford housing in Dubai increased to 50%, while earlier it rarely exceeded 5-10%. And developers are well aware of the full potential of this target audience.
So, in February, Dubai Properties Group presented a large-scale project of affordable real estate with a total area of more than 700 thousand square meters. meters in the Dubailand area.
The project called Serena, which will be implemented in five phases and will be completed in the fourth quarter of 2018, caused such an intense response from customers that all the off-plan villas and first-line townhouses for sale were sold out literally a few hours after the start of sales. This example was the first case in 2016 of how quickly the market can recover from stagnation if the efforts of its participants are directed in the right direction.
The segment of affordable housing in Dubai is currently actively replenished with new facilities through construction projects in the areas of Al Furjan, International City and Dubai Sports City. These same areas, as well as the free zone of the International Media Production Zone (IMPZ) and The Greens, are consistently included in the first five different ratings in terms of income from investments in real estate in Dubai. Here, the property owner can get from 7.71% to 9.4% of profit per year.
Megaprojects as a basis for development
However, local developers would not be so successful if they were not far-sighted. Therefore, the affordable housing sector is far from the only segment of the real estate market that receives increased attention in Dubai.
The year 2016 for Dubai promises to be the year of laying the future for the whole. Many large projects that will change the face of the city will be launched this year. This, for example, the Mall of the World, is a long-term and strategically important project of residential, office, hotel real estate with a total area of 1.7 million square meters. meters. Dubai Holding, which implements this master plan, said that in 2016 it will complete preparations for this grandiose construction to begin directly the construction of 278 buildings under the project.
Progress has also been made in the implementation of two other, without exaggeration, city-forming projects in Dubai - the Aladdin City mega-complex in Dubai Creek and the District One MBR City residential development area. The first of these projects, the Aladdin City complex worth US $ 15 million, will begin to take on its real form at the end of 2016.
The main and most anticipated event for the city will be the construction of the Dubai Canal, the building area on the banks of which is nearly 4.7 million square meters. On this territory, it is planned to build 5345 residential facilities, as well as hotel real estate with 948 rooms. Construction will affect areas and residential complexes such as Gate Towers, Jumeirah, and Peninsula (Beach).
Gate Towers will be a three-level integrated structure, the roof of which will visually connect to the green spaces of Al Safa Park. In addition to this complex, the Gate Towers development project involves the construction of a five-star hotel, hotel apartments and four residential buildings for 1,140 apartments. There is also a place for luxury real estate that can surprise the most demanding customers. Damac Properties introduced an exclusive apartment concept with a separate elevator for cars in the Aykon City complex, which will also become part of the canal coastal development project.
In total, about 211 residential complexes and 200 retail outlets, including shops and restaurants, will be built on the shores of the Dubai Canal. An artificial peninsula will be formed in the canal delta, which will add more than a kilometer of beaches to the existing coastline in the Jumeirah Beach Park area.
Another attraction of the emirate - the man-made island of The Palm Jumeirah - will also soon be transformed. The Palm Gateway complex worth US $ 380 million will become the new “gateway” to the island, and the second iconic Royal Atlantis hotel worth US $ 1.4 billion will be built on its outer crescent in addition to the existing Atlantis The Palm. This residential and hotel complex will accommodate 800 rooms, as well as more than 230 apartments with hotel services.
Another 90 residential luxury apartments will appear on the island thanks to the construction of the Royal Bay Residence from Azizi Developments. This complex will be located between two other notable dominants of the "palm" - hotels of the Anantara and Viceroy brands.
However, this is not all. To eclipse both the Eiffel Tower and even Burj Khalifa, a new unique skyscraper is designed, which Emaar intends to build in Dubai's Dubai Creek Harbor. The famous Spanish architect Santiago Calatrava Walls, known for his love of futuristic aesthetics, designs this design miracle.
Dubai - the city is perfectly suited precisely for the construction of modern large-scale facilities. The Tall Buildings and Urban Habitat Council (CTBUH) has named Dubai the leader in the number of ultra-tall buildings it has built. And in the coming years, four extra-tall buildings will decorate the Dubai skyline: RP Global plans to build the RP One skyscraper in the Business Bay area, the Meydan Group has already begun construction of the more than 100-meter Entisar Tower on Sheikh Zayed Highway and has proposed the 711-meter Dubai One project in the Meydan One area, and the DMCC plans this year to begin preparations for the construction of the Burj 2020 in the Jumeirah Lakes Towers area.
Payback as the final argument
And finally, even if such achievements and prospects cannot convince a skeptical investor, the practical side of the issue will definitely play the role of the final argument. This is one of the highest rates for investment income and rental housing in the world.
According to Land Sterling, the ranking of the most profitable areas for renting real estate in Dubai is headed by Discovery Gardens, where the average annual rental income is about 10.2%. Moreover, this figure has increased by 1% since 2014 due to the fact that the average price per square meter of real estate here has dropped to US $ 2,480. The second and third places in the ranking went to Jumeriah Village Circle and Dubai Silicon Oasis, where rental income is 10 % and 9.8%, respectively.
Moreover, these indicators are not just allegations of analysts. High rental income in Dubai is guaranteed, and literally. One of the three largest developers in Dubai, Damac guarantees its customers a rental income of 8% per annum for the first three years after the sale. However, guarantees do not end there.
Damac is also ready to provide investors with a 3% guaranteed return on investment in property under construction right up to its commissioning. A Damac capital guarantee compensates for the difference between the original value of the property and its capital value two years after commissioning, in case the price of the property decreases.
Thus, Dubai does not justify, but often even surpasses the most daring expectations of analysts. According to Deloitte, over the past 13 years, Dubai has been developing so actively that it laid a solid foundation for further price stabilization, which was inevitable. In general, the growth in housing prices in Dubai over the past four years has formed at the level of a weighted average of 11.6%, which significantly exceeds the similar indicators of other world capitals, such as London and Singapore.
You can obtain additional information on the acquisition and management of real estate in Dubai from IMEX Real Estate specialists by phone in Moscow +7 495 510 0008, toll-free phone in the UAE 800-IMEX (800-4639) or by sending a request by e-mail [email protected].
