Wealth Creation and Building Homes for Families

Dubai, United Arab Emirates: In an exclusive roundtable hosted by Grovy Developers at Ritz Carlton DIFC, Abhishek Jalan - Founder & CEO - shared his insights into the properties market in Dubai.

"Our commitment from handshake to handover to is what we promise to our customers which brings transparency to the ecosystem and offering a lucrative payment plan reduces the risk to customer. The payment plan should be linked to construction and we even if a client offers an upfront payment, we do prefer to proceed with the payment plan" Said Jalan.

The properties developed an Grovy deverlopers are primarily catering to end-user; but thid doesn't mean their not for investment purposes. "Many of customers - who initially intended to purchase our properties for themselves to stay at - end of using it as a financial instrument to enjoy the benefits on the rent RIO" Jalan added.

"Our objective is wealth creation and creating homes for families" Said Jalan. "35% to 37% of our buyers are end-users"

This roundtable coincided with the launch of the new project by Grovy Developer called RIVO in Dubailand, prices ranging from AED 1,200 to AED 1,500 (price/sqft) with a two bed-room apartment of an average size of 1,500 square foot.

Historically, the two bed-room apartments at Grovy Developers have yielded a better return than smaller units. In the Dubai Land area, where appx. 40%-60% of properties consists of studios; at Grovy Developers properties, studio apartment only account for 16% of the building.

Key takeaways from the roundtable:

Price range: within the past year (according to a report by Cavendish Maxwell), there is an increase in the number people who have rented previously who are looking to purchase properties. JVC, Dubai South and DLTC, these areas expanding and are faster selling. The fastest growing sector of the market are the properties ranging from AED 1M (USD 270,000) to AED 3M (USD 817,000).

Average age of buyers: We are seeing that the average age of buyers is coming down, whereas in the UAE, the average age is now 37 to 38 years old. Younger families are buying apartment and the average age has decreased by 10 years.

Increasing demand expected in the next year: Giving the population of Dubai and UAE increasing, with a GDP growth of appx. 5% across all sectors, these means there will more jobs created in the country which will attract more people to move and live in the UAE.

Drawing comparisons between Dubai and markets like the UK or India wouldn’t be the right approach: UK or Indian property market have been around for about a thousand years and there is a shortage of supply of land whereas Dubai property market has been actively marketed in the past 20 years and there is a growing population with a ample supply of land.

In the past 10 years, the rental return in Dubai has been about 9%; whereas now it is about 6.25% which is a sign of maturity in the market. Demand is still high and international investors are still very much interested in the UAE property market; one of the key reasons could be that other property markets' aren't performing and growing as much as Dubai.

"Appreciation on new master communities could be better such as Dubai South" Jalan said. "AED 1M to 3M are still the focus, which one will do better, only time will tell, but there will be growth in these new communities".

"Handshake to handover is very important for us; we want to focus on gradual growth, whatever we commit we deliver". "By 2030, we plan to deliver at least 1M square feet of residential properties" noted Jalan.