Bling could be back in Dubai property market
Some of the bling that once characterised the Dubai real estate market is set to return with celebrities seeking to build a new breed of luxury villas and over 50 shelved projects being resurrected.
From the ordinary buyer and seller perspective some 51 real estate projects valued at AED12 billion are being revived with government backed funding initiatives which means that developers registered with the Dubai Land Department can get building again.
Some 12 projects worth AED2 billion are underway and along with others set for starts in 2016 the initiative will see developers like Emaar Properties, Al Wasl and ICD-Brookfield working on projects.
To get the funding the projects need to have adequate infrastructure planned or already in place, a properly managed escrow trust account for off plan sales under Dubai real estate law, a technical report showing that at least 60% of the construction is completed and at least 60% of the project has been sold.
Meanwhile, the famous Palm Jumeirah is set to be rejuvenated with reports that leading celebrities and wealthy individuals are looking to build luxury villas on the manmade island.
This could see a series of lavish Los Angeles style super villas being built, according to property agent Anne Ogilvie, Palm luxury sales specialist at Luxhabitat. She believes that wealthy investors are set to return to Dubai.
‘These end users look to buy plots on the remaining unbuilt fronds in order to build super villas, akin to those in California or Miami. We expect a sizeable number of them to build and then introduce them to the secondary market,’ she said.
However, there are a number of issues associated with development on Palm Jumeirah. Some owners are not happy that fees for extensions to their existing villas have increased by 233%.
Under the terms and conditions laid out in developer Nakheel’s Guidelines and Procedures for Villa Extension Applications, residents are required to pay an application fee as part of the approval process before they can start construction.
According to property experts this means that for an extension of 1,000 square foot an owner would end up paying over $100,000 to Nakheel but on Palm Jumeirah the fee for a 1,000 square foot extension could be over half a million dollars.