The developer behind Dubai Festival City is selling the first freehold homes on the site after restarting work on stalled buildings following the 2008 financial crisis.Al-Futtaim Group Real Estate is selling four and five-bedroom villas starting from Dh4.8 million (US$1.3m) - the first to hit the market on a freehold basis on the north side of Dubai Creek.
It represents the latest sign of returning developer confidence in the city's luxury property market, which has benefited from rising demand for completed properties as well as an influx of funds from the wider Arab world.
The first batch of 24 townhouses to be sold at Al Badia Residences will be followed by the release of more houses and apartments over the next 18 months, according to Ian Plumley, the general manager of property sales at Dubai Festival City. Much of the demand is coming from regional investors.
"In the last nine to 12 months we have seen the premium coming to the top. Quality is selling," he said. "There are a lot of wealthy people living in Syria and Iran and they may not want to invest their wealth in their own countries now. Dubai is a safe haven."
Dubai Festival City helped to kick-start the emirate's six-year building boom in 2002 and at the time was billed as the biggest mixed-use development in the Middle East. The 1,300-acre site includes a vast shopping centre with 2 million square feet of retail space and about 1,000 apartments. It is also the new home for the Dubai Hard Rock Cafe.
Brokers and developers are reporting a sales activity increase in some prime Dubai property locations where prices have lost as much as half of their value since the 2008 market peak. Falling mortgage rates and the increased availability of completed units over the past year have started to lure buyers back to the market.
The first signs of rising rents for villa properties emerged during the first quarter of this year, with lease rates growing by about 3 per cent on the previous quarter, according to data from CBRE, the international property consultancy.
"At the peak of the boom, people were paying more for off-plan properties than completed ones, which didn't make any sense," said Craig Plumb, the regional head of research at Jones Lang LaSalle in Dubai. "It is good to see developers building first and then selling,"
Developers including Nakheel and Emaar Properties have this year started to sell new homes for the first time in four years. Last month, Nakheel launched Palm Views on the Palm island, a collection of 192 studio apartments aimed at younger residents. The developer has also announced plans to build new townhouses on the island. Emaar said it took just one day to sell all 224 of the apartments in its Panorama at The Views development last month.
The release of units for sale at Dubai Festival City comes just days after the emirate made more land available to foreign investors.
Two plots of land were released for foreign buyers in Dubai Investments Park on a leasehold basis for up to 85 years, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, disclosed on his website.
It was not clear whether the land was intended for commercial or residential use.