Dubai - Get more of Dubai’s tenants to switch over to buying their homes — developers are sharpening their marketing pitch to do so. And coming out with projects aimed at this core audience.
“Dubai’s home rentals are not going to go down — there’s no reason why it should,” said Rizwan Sajan, Chairman of Danube Group. “Official estimates reckon the population will grow from 2.4 million to 6 million by 2020.
“Even if we assume that only 75,000 of these are white-collar professionals with families, that’s still a substantial number that the emirate will have to absorb. But the new residential supply is only averaging 10,000-15,000 new units a year.
“Those new homes will not be able to absorb all of the anticipated population increase. And that’s why there is not much chance of existing apartments remaining vacant and forcing landlords to cut rents.”
Clearly, the current spell is not going to be a repeat of 2009, when both residential sales and rental values fell alarmingly.
For those Dubai developers who are now targeting the end-users, the benefits have not been slow in coming. Even though overall transactional activity is still way off from their 2013-early 2014 peaks.
“Affordable segment sales have generally achieved better response than others,” said Declan McNaughton, Managing Director at Chestertons Mena. “There have been a significant number of launches during the first two quarters, nearly half of them have been in the affordable segment, (those by the developer) Nshama being the prominent one. However, investors are in a wait and watch mode.”
The weak secondary market means there has been limited upward movement from the launch prices. This gives developers all the more clout in deciding how much they should offer as incentives to make buyers come to them.
“Many developers are readjusting their portfolios to meet the end-user demand,” said McNaughton. “Innovative payment schemes from developers can further encourage buyers to consider the option of owning a property.
“Several developers have now offered incentives such as flexible payment plans, cash discounts, reduced pricing for limited period, and full or part payment of (Dubai) Land Department fees.”
Content courtesy: gulfnews.com