Buyers seek better units in UAE says report
Dubai, May 4, 2009
Buyers and renters are showing renewed willingness to pay for better units and better locations in Dubai and Abu Dhabi, says a new study.
“Even if decline patterns differ between Dubai and Abu Dhabi, falling prices create excellent opportunities that boost demand in both markets. In April, we observed strong leasing and higher sales volumes,” said Jesse Downs, director of research and advisory services at Landmark Advisory, in the Q2 09 Dubai & Abu Dhabi Residential Real Estate Report.
In Dubai, Emaar is faring best in terms of demand and pricing. According to Downs, “with a flight to quality clearly underway, end-user preferences are differentiating prices in favour of quality developers like Emaar and preferred locations like Dubai Marina.”
In Q1 2009, Emaar master developments accounted for approximately two-thirds of sales and 57 per cent of new leases. More specifically, units developed directly by Emaar represented over half of sales and 39 per cent of new rentals, she said.
“Residents in Dubai see Emaar as a source of quality, not only for master-planned communities, but also for individual buildings,” said Downs.
Dubai Marina was the most popular area among renters, capturing 30 per cent of all new annual leasing contracts. Emirates Living came in second, at 16 per cent. Isolating apartments, Dubai Marina scored 30 per cent of all new apartment contracts. For villas, Emirates Living dominated, with 40 per cent of new villa rentals, followed by Mirdiff and Jumeirah/Umm Sequim.
Turning to Abu Dhabi, Downs explained that “the issue of first-phase master development integration will leave certain Abu Dhabi developers more vulnerable in the short- to medium-term.”
Landmark Advisory’s analysis shows a positive correlation between price performance and proximity to central Abu Dhabi.
“Aldar’s entire freehold/leasehold portfolio is in off-island developments on the city outskirts. In contrast, Sorouh will be less affected, as most of its freehold/leasehold properties are centered on Al Reem Island, which is close to central Abu Dhabi,” said Downs.
Sorouh’s secondary market prices have retained 20 per cent-25 per cent average premiums over their primary prices, while Aldar’s units averaged close to primary prices, and in some cases fell 10 per cent below.
Downs added that “prospective end-users in Abu Dhabi will increasingly differentiate first-phases based on ease of access to alternative/nearby amenities, like those found on-island in Abu Dhabi. These differentiators are already reflected in prices.” Overall, this trend is likely to continue for the next two-three years, until master developers integrate community-sustaining elements among project phases. – TradeArabia News Service