Developers are gearing their marketing pitch to convince tenants to buy their home, and projects focusing on this core audience are being started, Gulf News Property reports.
"Dubai's home rentals are not going to go down - there's no reason why it should," Danube Group Chairman Rizwan Sajan said. "Official estimates reckon the population will grow from 2.4 million to 6 million by 2020."
"Even if we assume that only 75,000 of these are white-collar professionals with families, that's still a substantial number that the emirate will have to absorb. But the new residential supply is only averaging 10,000-15,000 new units a year."
"Those new homes will not be able to absorb all of the anticipated population increase. And that's why there is not much chance of existing apartments remaining vacant and forcing landlords to cut rents."
Danube Group is now on their fifth end-user focused project, 'The Ritz', which offers prices at only Dh1,000 per square foot mark. It is a two-building project in the Al Furjan area and in proximity to Discovery Gardens. In total, 446 units are expected to be available by 2018.
The developer group is staking Dh300 million on the project with an overall development value of Dh1.5 billion.
"These units are coming fully furnished and will utilise space such a way that a one-bedroom unit can be converted into two bedroom spaces through convertible sofas," said Sajan. "It's aimed at the small family wanting to buy rather than rent and still want to have their private spaces."
"There are many ways that living spaces can be optimally used in the homeowners' favour. We are getting creative."
It has always been Danube's aim to stay within the Dh1000 pricing for their apartment projects believing this is what mid-income earners will be interested to get into.
For the earlier projects, clients will stay with the 1% a month installment scheme post down payments. "Even if a buyer wants it as an investment asset, he's still assured of an 8 per cent yield ... even higher," said Sajan. "When he takes delivery in two-and-a-half years' time, the rentals he will generate from leasing out will more than take care of his installments."
The Ritz is one of Danube's five ongoing projects, and they are sticking to their strategy of minimizing excess by not having spare land bank.
"If we sell off Ritz in quick time, we will be ready to launch a new project in another three months," said Sajan. "We will go about buying the plot just before that. There's no hurry."
