Rev Up for Le Rêve

Demand for premium apartments in Dubai is on the up, with stubborn negotiators losing out as prices creep higher

14 Mar 2014 words by Alexander von Sayn-Wittgenstein in Neighbourhoods

Where units in Dubai Marina's upmarket Le Rêve development could be found at around AED 16 million in the first quarter of this year, buyers are now looking at upwards of AED 20 million for a comparable property. The area's most prestigious address, Le Rêve has always remained in demand but movement was slow, and long-drawn-out negotiations tended to keep prices down. Buyers were reluctant to pay a premium when they saw other units available for less, so those that were on the market for AED 16m took several months to sell. Yet, now these are off the market, interest has been piqued and demand has surged.

This shows that even in a buyer's market, stubborn negotiating can be a false economy as property prices pick up. It takes only one or two buyers making a realistic offer for those negotiating around the AED 14m mark to suddenly find themselves faced with an entry price AED 4m higher.

The only two bedroom penthouse in Le Reve. Property ID 1457
The only two bedroom penthouse in Le Reve. Property ID 1457

Luxhabitat currently has four four-bed units in Le Rêve and we expect them to move quickly. Owners in this building have always preferred to keep hold of their properties and, as we see prices continue to increase, this won't change - that is, unless they can fetch an absolute premium. Prices here can be found as high as AED 72m among those who are not necessarily serious about selling but want to test the market value.

At Emaar's pivotal Six Towers development, one of the original in the Marina, prices are holding well. A 36th floor, 6,500 sq ft unit recently sold for AED 11m (1,800 per sq ft).

Elsewhere in the Marina, June saw an exceptional sale in JBR with a furnished property in Sadaf 8 (without a prime view) being bought for AED 11m. The price was the result of strikingly high-quality upgrades and expensive furnishings. In a cluttered market, upgrades do pay off and the property sold relatively quickly - in about four months. In comparison, there are less-well-upgraded properties with a similar layout and view on the market for AED 6-7m, and some with better views at between AED 9-10m.

In a property being sold as furnished, the emphasis needs to be on high-end pieces. Sellers who are prepared to invest are reaping the rewards

In general, buyers are still negotiating hard and a relatively small margin in context of the overall value can stall sales. Some are choosing not to purchase unless they can get a much cheaper price. The exception to this rule is in a case like Sadaf 8 where a property has benefited from the kind of upgrades that add genuine value; clearly, to justify the additional spend the quality must reflect the premium.

Buyers at this level know what they are looking for and, in a property being sold as furnished, the emphasis needs to be on high-end pieces. Sellers who are prepared to invest at this level are reaping the rewards.

The minimum asking price for a Marina penthouse has increased from AED 6m to AED 8m over the past few months and, as in other parts of the city, there continues to be an undersupply of premium apartment proper- ties in the area. In this respect Dubai differs from other major cities, such as London, Hong Kong and Paris, where high-end apartment living is more common and there is a greater number of larger, up-market options to be found. But for those with a substantial budget looking for an apartment, Dubai Marina (followed by the DIFC and Downtown areas) still yields the few choices available.