Wealth Monitor April 2016 | Page 20

PORTFOLIO | Property Ready Reckoner Business Bay DIFC Discovery Downtown Gardens Dubai 2008 Greens International City JBR JLT Jumeirah Village 1,720 2,800 938 1,100 1,150 1,400 1,370 2,000 688 1,050 1,700 Dubai Marina 1,365 1,800 1,600 2,200 2,700 850 1,250 1,700 2,700 1,210 AED per ft 2 Source: Asteco Dubai Apartment Sales Prices 2,050 maths behind affordability, “The UAE has over 820,000 middle-income households representing about 40% of all households in the country. By definition, affordable housing must not cost more than 30% of the gross household incomes for households earning between AED 10,000 to AED 30,000 per month.” “From market trends, we have observed that Dubai’s property sector is maturing, and there is clear demand for end-use homes,” he adds while underscoring the need to build houses for mid-to-low income bracket earning between AED 12000-25000 per month to drive Dubai property growth to the next level. Concurring with Durie is John Stevens, Managing Director of real estate services company Asteco, who says, “We are currently witnessing buyer preference focused on more affordable mid-market products as evidenced by the take-up iin recent launches targeting this market segment, this is the combination of an affordable price tag and attractive payment plans offered by developers.” Palm Jumeirah 2015 Find Good Reasons To Buy Off-Plan Off-plan properties became popular during the height of the property boom in Dubai in 2005-06. But the buyers of these properties were also among the worst hit when the market fell sharply in 2008-09. However, now as developers are seeing off plan sales making a comeback, this naturally raises the question around the risks involved from an investor’s perspective. Experts say, off-plan properties traditionally attract a higher percentage of investors and speculators than end-users when there are ample finished properties available for sale in the market. “Across the UAE, the rental market shows stability and therefore demand is still strong from investors for off-plan properties who are looking at procuring assets which yield a good return on investment,” maintains Stevens of Asteco. “Investor Optimism is Growing” Sameh Muhtadi, CEO, Bloom Holding, says the one positive trend over the last few months is that investor optimism is growing 18 The general sentiment in the region’s real estate sector everyone is talking about is that of slowdown. What’s your take? The real estate sector is going through somewhat of a slowdown, and in some parts of the UAE we’ve seen significant corrections in the prices. However, the slowdown is not everywhere. At the end of the day, it all depends on what’s on offer to the buyer, the location, the pricing level, and what’s the overall look and feel of the project. In regards to Bloom Properties, we’ve been doing extremely well. February 2016 was one of our best months ever. Though we’re not immune to what is happening in the market, we’ve positioned ourselves well in the marketplace, primarily because our emphasis is on being strategic more than tactical. All our projects are in prime locations. In a nutshell, the key to our success lies in our value proposition, i.e., we offer the right product in the right place and at the right price. Many players in the UAE’s real estate sector are struggling to maintain positive cash flows in the current market conditions and also as banks in the UAE being more cautious now while lending to property sector. Are you facing any kind of such issues? Banks certainly have become more cautious now, but that’s obviously in response to the property market conditions. Banks are now looking at feasibilities of the project much more closely, they rely more on independent evaluators reports, and they regularly review the projects progress. However, in so far as Bloom Properties are concerned, we haven’t had any issues in arranging project financing. When do you think the market sentiment will improve? The global economy and markets have become more volatile, complex and even more unpredictable and we a