More than 5,000 new homes are about to come on the market at bargain prices in Dubailand, the Dh235 billion (US$63.98bn) master-planned development off Emirates Road.
Sale and rental prices in Dubailand are already 20 to 40 per cent less than in comparable Dubai neighbourhoods, agents say.
Many owners in projects under construction bought off-plan at the height of the building boom and are now trying to sell their units.
But there are few takers outside the already established communities.
"The only demand is for completed property," said Hannah Bakshani, a Better Homes consultant who specialises in the Dubailand market.
Dubailand is billed on its website as "the world's most ambitious tourism, leisure and entertainment project".
Plans for the 3 billion-square-foot development include integrated Universal Studios and Six Flags theme parks, shopping malls, golf courses, offices and housing on a huge scale, creating a new international attraction.
But most of the development's entertainment components - including the theme parks; the Mall of Arabia, the world's largest shopping mall; and a Tiger Woods golf course - were put on hold in 2009, leaving the disjointed housing projects to battle for buyers with developments around the city.
The entertainment element "was the value added" for the Dubailand housing projects, said Matthew Green, the head of research for the property adviser CB Richard Ellis. "Otherwise it was just a development in the middle of the desert."
Many of the original buyers walked away from their purchases and forfeited their deposits during the economic downturn, leaving developments with hundreds of empty units.
More than 40 per cent of the buyers in Indigo Towers, a residential project built by H&H Investment & Development, defaulted, said Shahab Lutfi, the company's chief executive. Prices in many projects in Dubailand are already among the lowest in Dubai. In Falcon City, the development that was planned to include replicas of the Taj Mahal and the Eiffel Tower, a five-bedroom, five-bathroom villa is advertised for Dh3 million, or about Dh570 per sq ft. An 8,600 sq ft villa in The Villa, a Mediterranean-style development with more than 1,800 homes, is listed at Dh4.2m, or Dh492 per sq ft.
The average asking price for a villa in Dubai is closer to Dh860 per sq ft, according to the latest report on the market by Jones Lang LaSalle.
Hundreds of apartments are available for rent in the area as units at both the Remraam and Skycourts developments are handed over this summer.
A one-bedroom apartment in Skycourts, the 2,800-unit project, is advertised at Dh30,000 a year.
"The only place we're seeing property leasing is in the Villa project," said Michael Michael, the director of sales for Landmark Properties. "Everything else is a non-issue."
Established communities with completed shopping centres, parks and community amenities, such as Arabian Ranches and the Green Community, are enjoying sales activity, local agents say.
But the newer developments are often surrounded by desert, with supermarkets and parks still nothing more than designs in future plans.
"The lack of these facilities contributes to the desirability and demand of such stock, which in turn cause values to drop further and puts additional pressure on the demand of some more known areas," the property consultancy Cluttons said in a recent report. Dubai Properties Group (DPG), which is developing Dubailand, is still committed to building the infrastructure and entertainment elements of the project, said Khalid Al Malik, the chief executive. He said contracts were being renegotiated and a new master plan would be announced by the end of the year. "The good news is that DPG is going ahead with Dubailand," said Mohanad Al Wadiya, the managing director of Harbor Real Estate, which is marketing the Skycourts project. "The reality is that people should be happy the project will still be done." But in the short term property executives believe it could take years for the market to absorb the new homes coming on to the market
"A lot will be occupied and a lot will stay empty," said Thomas Bunker, an investment sales consultant for Better Homes.
kbrass@thenational.ae
