Even with declining property prices in Dubai, the city is seeing developers roll out scale models for more elaborate property projects. One fair gaining a reputation for featuring shining skyscrapers, golf-course villas and houses is Cityscape.
This week, the fair presented the Jumeirah Central project that will see an entire district of residential and office blocks, hotels and a mall up for sale to potential buyers. The property will be located in the city’s heart, Sheikh Zayed district and is owned by Dubai Holding, the developers behind the sail-shaped Burj al-Arab hotel.
Another development announced before the fair began was Emaar South (model pictured below). The project is expected to be built in Dubai South by Emaar Properties, who also happen to have built the Burj Khalifa among other Dubai landmarks. The location of the project will see it in the same area as Dubai’s second airport, Al-Maktoum. The new airport is set to overtake Dubai International as the base for Emirates Airline and may even become the world’s largest. “It is really amazing to get the chance to keep expanding this city,” Emaar chairman Mohamed Alabbar said at the launch. “Keep in mind that we are (only) 40-plus years old… We are really young as a country and as a city and there is a lot to do,” he added.
Nakheel, the developer behind the man-made Palm Jumeirah, used the first day of the fair to announce an apartment complex that may very well become the star of the Dubai skyline. Back in 2002, the city was a magnet for property investments when the sector opened freehold inventory to foreigners. Thanks to this, value of properties climbed at breakneck speed until 2009 when the global financial crisis hit. With the help of tourism, trade and transportation, Dubai property was able to trend upwards again between 2012 and 2014. When the bubble burst again, it was at a slower pace where it dropped by 15% according to property consultancy firm Jones Lang LaSalle.
According to another property consultancy firm Cluttons, prices are set to soften later this year and will see the average price per square foot stand at 1,375 dirhams ($375). “We see the residential real estate market bottoming out by the end of this year,” said John Stevens, managing director of Asteco real estate services. While some decline is expected, Stevens said that the market is expected to be stable. Some attribute the drop in the market to the fall in Russian ruble last year as well as Brexit that saw the British pound drop. However, the good news for Dubai is that there is still interest coming in from other regions.
Transactions amounted to 57 billion dirhams ($15.5 billion) in the first half, according to official statistics, with Emirati nationals topping the list with deals worth 14.5 billion dirhams.
The rest were snapped up by foreigners led by Indian investors, with transactions worth seven billion dirhams, while Saudis and Britons clinched deals totalling four billion dirhams each.
“External factors over the years have always affected the appetite from certain countries,” said Stevens. “Certainly in the past 12 months, we’ve seen much greater interest from China, for example.” Only time will tell if the property market will improve in one of the fastest growing cities in the region.