Dubai developers go easy on off-plan launches
Even if the pace of handovers pick up significantly in the next seven months, they are unlikely to reach anywhere near the 50,000 units and over that some were predicting at the start of this year. And there were real fears about an excess of supply accelerating the decline in property values, and at a time when the market can least afford it.
So, what could be the final handover tally for this year? Consensus is building around the 30,000-35,000 units, though there are some who believe even that is too optimistic a projection. But what is clear is that an oversupply crisis is not going to happen ... yet.
“The pattern of actualisation rates being substantively lower than expected handovers has been a recurrent theme in the market since 2014,” said Sameer Lakhani, Managing Director at Global Capital Partners, the consultancy. “This year is likely to be no different.”
“Launched units this year has seen a marked slowdown with 11 projects totalling 3,218 units in the first five months, a 76 per cent drop from last year where we saw 46 projects with 13,684 units. We expect the number of units launched to increase, but there is a clear emphasis now on deliveries rather than launches, and we expect the final tally to be lower than that in 2018.”
Among the developers who did step out with new releases this year, there are the big names — Emaar, Meraas, wasl Properties, and Dubai Holding. Private players too have tested the waters, such as Sobha Realty with a twin-tower launch, and Nshama which continues to release new units at its Town Square community.
This is where Dubai developers are definitely doing better than in 2018. Both off-plan and ready property sales have maintained a brisk space, with developers such as wasl Properties reporting the entry of more first-time buyers for their recent releases at Jebel Ali and at Zabeel.
Not that the more established parts are falling behind in attracting buyer attention. “The off-plan space has shown the greatest increase in areas like Downtown Dubai, Dubai Hills, and Dubai South, all being Emaar projects and amply reflected in Emaar’s first-quarter results,” said Lakhani. “In the ready space, the areas where there has been a spike in Palm Jumeirah and Akoya (the project from Damac).”
“The transactional activity for the first five months shows a steady run rate in the ready as well as off-plan space. In terms of value, the ready space has registered an increase of 12 per cent, whereas off-plan increased 18 per cent.”
Clearly, developers are intent on playing the waiting game for demand to catch up with supply before they push through with more off-plan launches. The most keenly awaited launches or updates would be anything earmarked for the “Mina Rashid” development and those at “Burj Jumeira” enclave, which will have a 550-metre skyscraper as its centrepiece.
Dubai Hills and the Downtown — the two most in-demand locations for off-plan purchases in the first five months, accounting for 1,001 and 976 units, respectively. Dubai Creek Harbour came in third with 604 units. In all, 8,361 off-plan units were sold Dubai in the year to end May, a 1 per cent gain on 2018’s tally for the same period.
Dubai Marina and International City — the locations with the most sales for ready homes, with 613 and 409 units, respectively. Ready home sales totalled 5,671 units so far this year, a marginal gain on the 5,642 homes last year.