18 December 2018
Dubai: Sign of Spring(s)
In 2002, Emaar launched one of the first freehold horizontal communities called “Springs” consisting of roughly 4,000 townhouses with various options in the two and three bedroom space. A price analysis of the units in the community reveals a staggering variance which can be attributed to a plethora of factors, including the view, the upkeep of the unit, the location within the community and the proximity to community centers.The above graph reveals a scatter plot of the transactions in the two bedroom space for the Springs communities over a 8 year period. Prices have fluctuated across the board during this time, encapsulating two market cycles, but the min-max price range has been 2 million (which is in excess of the current price of a 2 bedroom unit). This staggering variance has been due to a plethora of factors, including the view, the upkeep of the unit, the location within the community and the proximity to community centers.
As communities age, the upkeep of the property becomes the dominant factor in pricing, superseding traditional variables such as views, plot sizes and location. It is because of the upkeep that we witness “anomalous” transactions in the data.
With the passage of time, secondary market transactions will be dominated by this factor, suggesting that generally investor owned properties that are not maintained well will tend to lag significantly in the coming years, and that an intercommunity analysis will become increasingly heterogonous.
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