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Dubai developer pushes new launch despite supply worries

Dubai developer pushes new launch despite supply worries

Dubai: Azizi Developments has launched offplan sales at its new tower in Dubai Healthcare City, thus becoming the first developer to do so after the Dubai Government set up a committee to look into demand and oversupply issues.

But despite the launch, a top official at Azizi said the Dubai property market is in dire need for controls. “There has to be some in place to regulate supply - not all developers can come in, build and then expect to sell,” said Farhad Azizi, CEO. “If developers keep doing that, it will dilute the market. That’s dangerous.”

Danger is having more of the same

The bigger risk for market stability is when “developers keep adding more projects at the same location - particularly those locations where there is no demand,” the CEO added. “There are such locations in Dubai, and all developers, irrespective of size, need to be careful.”

It was earlier this month that Dubai set up a “Higher Committee” that would look into all aspects related to development and market needs for the next 10 years. Topping the agenda, however, will be to find ways to bring down drastically the chances of a flood of new homes being built with no buyers for them.

The market is already taking a wait-and-watch attitude on what steps the Committee could take to tone down concerns. Azizi says that’s why the Committee’s formation could not have been delayed any longer.

“The market has not been performing anywhere near wonderful; even 2018 was not good and sales during August did not go well for anyone,” he added.

A change of tactic

For the latest project, the “Creek Views”, the developer came out with a new strategy. Sales had actually opened last year, but then was stopped one month later.

“We had another project next to the site, the “Aliyah”, which we wanted to finish first and handover,” he said. “This was done last month - we have a near 100 per cent sellout on this. It meant there was demand for the location - DHCC - and that’s why the Creek Views’ sales are being relaunched from today.

“It goes back to what I said before - be sure about demand for the location/area and then launch. Any uncertainty, it’s best not to at this time.”

Creek Views, scheduled for completion late next year, is 24 per cent built up. Prices for a studio start from Dh522,000 for a studio, a decent markup from the sub Dh500,000 for a similar unit at the Aliyah. There are 634 units in all, across formats.

“The payments will be split 50:50 - I don’t believe in the crazy post handover payment plans that are freely available in this market now.”

Fast-track construction

Azizi said there could be more launches before the year is out. But priority is being assigned to the sprawling “Riviera” community it is building at Meydan. The number of low-rise buildings have been consolidated to 74 now, against the 100 odd at the time of the launch.

“The only focus is to fast-track construction and deliver to buyers’ expectations, with the first of these being ready in the first quarter of 2020,” the CEO said. “Today’s market will not support project delays - it has to be full-speed ahead.”