Sellers and developers now need to add value to their proposition
At any Dubai dinner party, you can be sure that at some point, the topic of conversation will turn to the property market. It’s a conversation nearly as old as “How long have you been here”? The tone of the property conversations has become a little less gleeful since 2014.
Since the beginning of 2019, we have seen properties in the “super-prime” market begin to transact at unparalleled lows. I am witnessing Emirates Hills and Palm Jumeirah home transactions drawing price comparisons with 2011, depending on their location. There is no mistaking that these are tough times for sellers.
In a market that is weighed as heavily in the buyers’ favor as the Dubai market currently is, vendors and developers are having to become increasingly inventive to put themselves in the vanguard. Gone are the days of hoping to attract the correct buyer solely through traditional means. Websites, conventional media, and social media all have their place and will continue to do so for many years to come, but sellers and developers, particularly in the super-prime market, are now faced with the prospect of having to add value to their proposition. Value is the new buzzword. Value is what is moving units in an increasingly competitive environment.
With this adversity, there is a new and almost entirely separate market burgeoning. A market that has typically been very well-received in other luxury property sectors across the world. A market that appeals to end-users as much as it does to holiday home hunters. The market for “turnkey” or “ready to move” luxury property is beginning to command premiums that are being met by individuals less interested in taking on the minefield of developer permissions, NOCs, municipality regulations, and contractors. They see far more value in the prospect of walking into their new home and simply unpacking their bags and heading to the office or straight to the pool. As individuals and companies begin to feel the pinch of tightening profit margins and pockets of global economic uncertainty, the phrase “time is money” has never been more prevalent.
Developments associated with luxury living such as One The Palm, W Residences, Volante and the impressive Royal Atlantis have all identified this growing trend and are subsequently offering incoming owners the opportunity to purchase furniture packages, meaning that the apartment will be “turnkey” when they take occupancy. From the dining tables and chairs to the bed linen, everything is taken care of. Gone are the days of purchasing the little items that make a home homely. The developer can take care of this. Forget having to think about making the beds on your first night, it’s all taken care of. Internet connection? Done. You can even have your fridge stocked with essentials for the first night. With this tilt towards offering a ready product in a time-sensitive market coupled with lower entry prices for some units should mean that it is only a matter of time before we begin to see small-scale home renovation companies purchasing rundown homes, renovating them and selling them for a profit. This will be a great sign of a maturing market, more in line with the cities we love to compare Dubai with – London, New York, Singapore, etcetera.
BARNABY CROMPTON
CEO,
Crompton Partners Estate Agents
