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A new dawn, a new attitude
Michael Lahyani (Column) / 22 April 2012
Developers have to compete in a tougher climate and come up with quality stock
It has now been four years since one of the worst global financial downturns crippled markets around the world, including the Dubai real estate industry. As we enter the second quarter of 2012 there is a definite air of optimism amongst experts and industry insiders and there appears to be, quite literally, concrete evidence of a real recovery as the city tentatively recuperates from the crisis fallout.
It would appear investors are beginning to regain confidence in the industry as the economy and its underlying systems and processes improve.
As has been well documented, the unrest prevailing in other parts of the region has benefited more stable locations such as the UAE as businesses and investors look for safe havens for their cash, services and families. Indeed, hotels in Dubai have seen a rise in occupancy as tourism in Egypt, Jordan and Bahrain has taken a hit with the UAE being seen as the best regional choice for winter sun-seekers.
New initiatives such as e-governance, paired with improved regulatory policies and court procedures — plus the government’s drive to make internal processes and procedures more transparent — are all helping to establish trust in a system which has suffered from a poor reputation in the past.
House prices in Dubai are also showing signs of a revival. Average prices rose 2.3 per cent during the last three months of 2011 and reports indicate the trend is continuing into this year.
On hold projects have been re-started and we are once more witnessing the launch of a number of new developments — something almost unheard of since 2009. Crystal Towers, the yet to be launched project by Al Fattan, the developer of the successful Marine Towers and Oasis Beach Hotel, is due to get under way this year. This will undoubtedly bring even more residential opportunities to the glittering towers of Dubai Marina and further eradicate the doom and gloom mood.
Another new recently announced project, which has caused much public and media interest is The Palma Residences, a unique community concept by Dubai’s leading real estate developer Nakheel. The new development of town houses will be located on the Palm Jumeirah in close proximity to the already popular Shoreline and Marina Residences. The project broke ground just last week and according to Nakheel thirty units at a combined value of Dh223 million have already been sold, with 30 more serious potential buyers in the pipeline.
But these, and other new developments, will not simply be a return to the ‘good (bad) old days’. Investors are battle-scarred and wiser and developers and landlords have learnt harsh lessons; they know they have to compete in a tougher climate and come up with quality stock. Gone are the days of vague or non-existent floor plans, tiny balconies and odd-shaped rooms. Homes will need to be built with customers, rather than quick profit in mind. Floor plans will be readily available and accurate and balconies and terraced areas will be usable and worthwhile rather than simply a tick-box on some sales literature. One of the biggest differences to the post-crisis building boom will be the focus on location. Both buyers and renters now have the luxury of choice and the old adage of location, location, location will be truer than ever.
A dusty edifice with very few facilities in the far reaches of the city is no longer a viable option. Investors know that promises of nearby amenities, decent views and bustling neighbourhoods in places such as Dubailand remain a long way off. New developments, the successful ones at least, will undoubtedly be found in prime areas such as Dubai Marina, Downtown Dubai and Palm Jumeirah — established communities with everything residents need at their doorstep.
These new developments, and those to come, are the seal of approval the market has been looking for, recognising what we can achieve with positivity and hard work in order to establish the market once again. There is no doubt Dubai’s brand is still very strong, but quality developments located within in-demand locations backed up by an improving infrastructure have a vital role to play in supporting these early shoots of recovery.
The writer is the chief executive of propertyfinder.ae. Views expressed by the author are his own and do not reflect the newspaper’s policy
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