International City’s reputation as ‘bachelor haven’ pushes property prices down

Property prices in certain freehold areas across Dubai are showing signs of resurgence, but gloomy days are not yet over for owners of units in International City.

Studios and one-beds that were bought for Dh220,000 and Dh320,000 during launch are currently being offered for sale at prices between 33 and 39 per cent lower than their original price.

The current asking price for studios is between Dh160,000 and Dh175,000, while one-bed units are listed for Dh240,000 to Dh285,000.

The asking price for few studio apartments in Greece cluster is as low as Dh150,000.

However, prices of apartments (studio and one-bed) in the newly-released Emirati cluster range between Dh200,000 and Dh290,000.

One of the factors affecting sales in this affordable community is lack of home finance availability for prospective buyers.

With very few banks offering mortgages, majority of the deals are done in cash.

The other reason for a lack of buyer interest is that the community has become the so-called bachelors’ refuge, with seven to eight people sharing a studio apartment.

Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, says: “If you look through the trend when they were launched there were a good section of end users that bought into the development.

“Today, we feel the end-users have exited the community and is more known as a bachelor or staff accommodation.

“Today’s buyers are purely investors who are looking for a reasonable rental return.”

He adds that prices seem to have stabilised to a certain extent, but aren’t going to improve in the near future.

Nakheel, the master-developer, has of late started handover of 1,663 units in the Emarati Cluster, which comprises 26 buildings.

Currently, the occupancy level is over 80 per cent, estimates Gafur.

International City was launched in July 2002 and consists of a residential district and a central district.

The residential district spreads over an area of 300 hectares and comprises 387 buildings, which has 27,437 units, made up of 22,235 residential units (44.5 sqm studio and 66.5 sqm one bed) and 5,202 retail units.

The central district covers an area of 21 hectares and consists of 34 plots.

Earlier this week, Jones Lang LaSalle, a global real estate consultancy, said approximately 3,000 additional residential units were added to the market in the first quarter 2012, bringing the total current residential stock to around 341,000 units.

The 44 per cent of residential stock added in the first quarter is located within the submarkets of International City, Dubai Marina, Discovery Gardens, Jumeirah Lakes Towers and Dubailand. Almost 90 per cent of the completions in 2011 were apartments.

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