New off-plan launches in Dubai push prices lower
Developers come out with price points that better reflect market situation
Dubai: For property buyers in Dubai, the discounts and bargains continue to happen. A private developer has come in at lower price points for its new off-plan development in Jumeirah Village Circle — the same location where it has another building at higher prices.
The Riviera Group is offering units at Dh790-Dh1,000 a square foot at the La Riviera Apartments, a ground plus four podium and 17-storey structure which went on sale on Monday (January 30). That is at a discount compared to the Dh1,100-Dh1,150 square foot for its earlier launched project at the same location. (The Riviera apartments will create more than 140 units to Dubai’s residential tally.) For the developer, such pricing gaps offer quite a few reasons for buyers to get in and, more importantly, keep meeting their payment commitments through the course of the project. “The market is such no developer can come in overpriced on off-plan launches,” said Abdul Rauf Razzak, CEO. “And at times like this, the developer has to come up with pricing that can still have investors feeling secure.
“It will leave buyers feeling secure enough to keep paying on time. On our part, we have been playing our part by delivering on time.”
With recent off-plan launches, Dubai’s developers have used pricing as a leverage. They have tended to be 5-15 per cent lower than what ready or near-ready properties are asking. And developers have also played around with smaller unit sizes, again making the cost of ownership more accessible, and by extending the payment period beyond handovers, with Properties Investment confirming earlier this week that it allows up to eight years post-handover for its town houses at Green Community West Phase 3.
For Riviera, its insistence on one or two projects at a time has been fruitful. At its eight earlier projects, and totalling 969 units, it has hit the 100 per cent sold mark. They have a current combined value of Dh900 million
“We have the land bank for a further three projects and 600 apartments,” said Razzak. “Two of these are plots in the Meydan master-development and one in Jumeirah Village Triangle. These are all paid for. We have options to acquire more if there are signs of demand.
“We have the necessary funds on call from local institutions to take the projects forward — on the current one, that’s 75 per cent bridge finance availability. But it’s strictly backup … we need to call it in only if there’s a shortfall in our own funds.”
The launch from Riviera caps a good month for Dubai’s off-plan launches, and market feedback suggests more to come this quarter. Also coming up will be the 2016 financial results from a slew of Dubai’s leading developers — indications are most of them did enough in the last quarter to pull out a fairly decent set of results despite the soft market.
But some developers are also cautioning against going full-throttle with new launches especially at a time when the economy is still on the soft side and many potential buyers continue to hold back investment decisions.