By Ed Attwood
While Damac's latest Bugatti-styled villas may seem attractive for high-end buyers, Dubai is still lagging behind when it comes to affordable housing, says Ed Attwood
By the standards of the last three Cityscape events, the 2015 version was quieter than usual. There was no shortage of visitors, but a lack of the sort of megaproject announcements of yesteryear left them with relatively little to do but mill around and chat.
Given the state of Dubai’s property market, that shouldn’t come as a major surprise. Knight Frank announced last week that the fall in the city’s real estate prices was the highest in the world during the second quarter. As a result, most local developers used the show to launch or relaunch smaller projects, or to showcase existing ones.
There were some highlights, particularly on the luxury side. Nakheel announced the Palm Promenade, a 1.5km walkway along the trunk of the Palm Jumeirah. Kleindienst Group, appearing at Cityscape for the first time, showed off its ‘floating seahorses’ — which look like a sort of high-end houseboat. These will be moored off the three islands that Kleindienst Group is developing as part of Nakheel’s The World megaproject.
But topping them all was Damac’s announcement that it would be building a set of Bugatti-branded villas in its Akoya Oxygen development. Damac already has ties with a varied mix of brands and celebrities, including Tiger Woods, Fendi, Versace, Paramount and, ahem, Donald Trump. Quite how the Bugatti brand fits in with what is being marketed as an environmentally sustainable project is unclear, but Damac certainly found an interesting hook for its latest offering.
“Your home features its own unique glass-walled parking space, so you can cherish your car even when you’re not driving it; whilst your guests can sit back and admire the unique centrepiece to your home,” runs the Damac sales pitch in its glossy brochure.
I doubt whether I will ever be fortunate enough to enter one of Damac’s Ettore 971 Bugatti-styled villas, let alone own one. The cost for each starts at an eye-watering $10m. However, even if something remarkable were to happen to my finances, I can’t imagine driving my clapped-out 2007 Chevrolet Captiva into my sitting room, and then inviting my guests to sit back and admire the unique centrepiece to my home. But let’s be frank here — I’m not really a member of Damac’s target demographic.
All this outpouring of luxury will no doubt be good news for Damac’s bottom line, assuming it can find the buyers. This being Dubai, that certainly seems likely. But it does mask a wider problem that Dubai’s property market still faces: the availability of affordable housing. According to JLL, only 22 percent of the residential units released onto the market this year are fit for mid-level income budgets — that’s households earning between AED10,000 to AED30,000 a month.
There are some developers — Nshama and MAG Properties, for example — that are attempting to fill this gap. Credit must also go to Dubai South, which is launching a rent-to-own scheme in its upcoming The Villages project. However, the issue of affordable housing is becoming more pressing as inflation is now at its highest point since 2009.
Floating villas and car parks in houses may make for eye-catching headlines, but a proposal by the Dubai Municipality to introduce mandatory affordable housing quotas for all new residential projects in the city cannot come soon enough.