If Cityscape Global is an accurate barometer of Dubai’s property sector, things are looking up. writes Ben Flanagan.
There was cautious optimism in the air at the annual property extravaganza, as several new, rebranded or revived megaprojects were showcased with at least some of the glitz of the pre-downturn days.
But it was hardly ‘Recession, what recession?’ Few can deny the southerly direction of Dubai property prices over the last year, with the market ranked by Knight Frank as the worst performing globally.
And for all the bling, some say it was lower-cost, ‘affordable’ developments that stole the show.
Here are Benchmark’s top trends dominating last month’s Cityscape.
Everyone knows there has been a sharp decline in Dubai property prices over the last year – but Cityscape was full of positive vibes and suggestions that the market is bottoming out.
“There was a bit of a buzz about it, probably far more so than the year before,” said Richard Paul, head of residential valuations at property consultancy Cluttons in the UAE.
“The year before, the market was softening very quickly. Now you can just tell that there is a little bit of excitement in some of the projects that are going on. There was a lot of positive noises,” he added.
Despite that, Cityscape has still not recaptured the heady spirit of the pre-recession years.
According to the show organiser, Cityscape Global attracted over 300 exhibitors – a 15 percent increase on last year – on the back of what it said was a “stabilising” property market.
The event was spread over 41,000 square meters of exhibition space and two additional halls.
But exhibitor numbers are still below the peak of 2008, when 340 companies were on show, according to press reports at the time.
Many property shows are focused on a particular geography. But Cityscape Global – as the name suggests – covers more than just Dubai.
“It has more of an international feel to it… there are projects and people from all over the world,” said Mr Paul.
Developments in Turkey garnered a lot of attention, with more than 50 exhibitors from the country on show. Turkey’s real estate sector is “a hotspot for GCC investors”, according to the show organiser.
“In 2014, Gulf investors spent $4.3 billion in Turkish real estate, reaching a total investment influx of $16.29 [billion] over the past six years,” said Wouter Molman, director of Cityscape Group, in a statement.
While most indices suggest falling property prices in Dubai – as well as in some other parts of the UAE – investor sentiment suggests an imminent turnaround in the market.
According to a survey by YouGov released just prior to the opening of Cityscape Global, 58 per cent of investors think Dubai’s real-estate market will grow over the next 12 months.
The survey of 861 UAE residents found that properties near public-transport links are the most in demand, followed by those close to grocery stores, retail shopping malls and mosques.
Dubai may have made its name with swanky property developments, but more and more launches are geared towards those with lower budgets.
The trend of ‘affordable’ developments continued at Cityscape, with Nakheel unveiling its Jebel Ali Gardens scheme, a master-developed project set to include almost 10,000 apartments across 42 buildings.
It’s aimed at middle-income buyers, though Nakheel did not specify prices. And developer Nshama is offering lower-priced Dubai homes, including three-bedroom townhouses priced at less than $270,000.
The YouGov survey conducted for Informa, the organiser of Cityscape Global, found that studios and one-bedroom apartments are growing in popularity in the UAE, with investors shifting their focus to smaller, lower-cost residential options.
Despite the focus on affordability, a taste of ‘Dubai bling’ is never far away.
The Dubai developer Damac, for example, used Cityscape to launch the world’s first homes styled by sports-car brand Bugatti.
The seven-bedroom Bugatti Villas are set to be built at the developer’s AKOYA Oxygen project. The price? A whacking Dh36 million each.
A number of high-profile projects were also on show at Cityscape – proving that Dubai’s status as ‘superlative city’ has never quite gone away. They include the Meydan One megaproject, which will include the world’s longest indoor ski slope and highest residential tower.
Although Cityscape is meant as a showcase for potential new projects rather than a sales platform, commentators pointed to trends in how properties are being sold in the UAE.
These include the emergence of more flexible payment schemes, partly due to restrictions on mortgages for properties sold off-plan. Nshama, for example, offers a payment plan on its Warda cluster in Town Square, where two-bedroom properties start at Dh749,888.
Investors pay 10 installments of 5-10 per cent of the property value spread over 29 months, followed by a 20 per cent chunk upon completion.
“Speculation of properties has been controlled and because mortgage [loan-to-value] has been limited at 50 per cent for off-plan projects, most developers are offering easy payment plans,” said Kash Kanjwani, Director at Sky View Real Estate Brokers, in a statement.
Chinese architecture and design firms stole the show at the Cityscape Awards for Emerging Markets, which honoured global real estate development.
Asian firms were big winners at the awards, scooping eight of the 13 categories for projects in Hong Kong and China.
Architect firm Aedas clinched five awards for various developments in China, including the gong for the best future mixed-use project and best retail project.
There were several ‘megaproject’ announcements at Cityscape, but not as many as in some previous years, says commentator Craig Plumb, head of research for the Middle East and North Africa at consultancy JLL.
Mr Plumb said however that there was more of a focus on expanding other phases of existing master-planned projects.
“[There were far fewer] new mega projects launched than in previous years – with [the] emphasis on selling further stages of already announced projects,” he said.
Still, there were some high-profile announcements around projects such as the Burj 2020 and Sharjah Waterfront City.
But some of the new projects being unveiled at Cityscape Global were not new at all – but rather, reboots of previously announced developments, or new components within existing master-planned developments.
For example, Sharjah Waterfront City was previously known as Nujoom Islands, while Dubai South is the new name for Dubai World Central.
“Most of the projects announced at the recent Cityscape Global in Dubai were not new projects but additional components to projects that were initially launched some years ago,” said Mr Plumb.
“Several new schemes have also been launched recently as part of previously announced master plans including MBR City, Dubai Lagoons and Dubai Canal.”