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26 May 2024

Developers buying units for resale

By Eudore R Chand



The rising per square feet rates in upcoming real estate projects – especially along Sheikh Zayed Road – have encouraged some developers to enter the secondary market to buy out units they had previously sold at less than Dh1,000 per sq ft.

They plan to hold such units until construction is completed and then offload them at the much higher prevailing rates, which are going up almost on a daily basis, industry insiders told Emirates Business.

At least two developers in the Business Bay area have been active in the secondary real estate market, with one of them offering to buy back units at Dh1,500 to Dh1,600 per sq ft, they pointed out.

This phenomenon emerged when such developers saw the likes of Emaar and Deyaar sell their new launches in the same Business Bay area for prices ranging from Dh2,100 to Dh3,000 per sq ft.

Sources close to one of the developers dabbling in the secondary market said he has re-bought unfinished units he had previously sold at a small premium and now plans to resell the same units for Dh2,500 per sqft or higher.

Prices in the Business Bay area have risen substantially in the past few weeks ranging from Dh1,600 to Dh2,200 per square foot or higher depending on the property, its amenities and its location.
When projects were first launched in the area, buyers had been able to purchase units at Dh800 to Dh1,200 per sq ft. Some of the owners are now offering the same properties in the secondary market at up to Dh2,200 per sq ft.

Real estate agents predict that the lower levels in the current price ranges will vanish in the short to medium term and that average prices in the Business Bay area will edge towards the upper limit of Dh2,400 or more.