Land prices in Dubai, as we reported earlier this week, have risen some 64 per cent this past year, pushing property prices even higher.

This make living in the emirate tougher for people on a low income, something that several developers have said they believe fits the long-term aim for Dubai – that those earning less live in surrounding areas such as Sharjah and Ajman (which is of course good for those emirates as it will help push up property values).

With land prices becoming so high, sub-developers argue that they can’t afford to building more affordable homes, because the economics don’t add up. Hence the proliferation of luxury homes.

Shaikh Holdings, which is developing Sanctuary Falls in the Jumeriah Golf Estates, said that for it to make money on its investment, it needs to price villas accordingly. This is an issue for other smaller developers that are trying to carve a niche in the luxury segment.

It is building 96 resort style villas, ranging in price from Dhs8.5m to Dhs21m, and because there are so few buildings it needs to price them high. ‘This is 96 units, not a community of 500 units,’ said CEO Imran Shaikh. ‘We are trying to put a value proposition forward saying yes we are expensive, but look at the attention to detail.’

The company claims to have sold just over 60 of the 96 homes – none of which have been built yet – already. Golf resorts are a popular luxury market, and Shaikh’s buildings will be next to the Greg Norman designed Earth course.

Dubai has built itself a reputation of missing delivery dates for properties. Shaikh Holdings says it has built in financial penalties if dates slip. Like other developers, we shall keep an eye on whether or not it delivers on time.

This entry was posted on Wednesday, October 17th, 2007 at 11:41 am and is filed under Cityscape. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.