Watching the glitzy opening act of the world’s tallest building in Dubai on Jan 4, one could be forgiven for momentarily forgetting that this deeply-indebted emirate faces immense problems.
The 200-storey building — formerly referred to as the Burj Dubai — rises majestically to 828m (read prosperity in Cantonese) and is now interestingly known as The Burj Khalifa, after the ruler of neighbouring emirate Abu Dhabi. It was oil-rich Abu Dhabi that had thrown a lifeline — in the form of a multi-billion-dollar bailout — which enabled Dubai to avoid a potentially disastrous debt default in November.
Property prices in Dubai — once dubbed a real estate fairy playground — have plunged since the crash in 2008. Construction of the Burj Khalifa began at the height of the economic boom in 2004 and its opening had been delayed twice.
While the Dubai property crash was seemingly ignited by the impact of the global financial crisis that hit the emirate — which before then, had been riding a six-year economic boom — the timebomb had started ticking due to the frenzied building activities.
Going into 2010, the unveiling of the Burj Khalifa is geared at rekindling optimism in Dubai’s real estate. Nakheel, a property arm of the indebted Dubai World, is struggling to regain investor confidence severely bruised by the crash that has caused thousands to lose their jobs while projects worth billions have been cancelled or shelved. To do that, Dubai will first have to show the world that Burj Khalifa will be filled up — which is no mean task.
Meanwhile, back home, optimism is the word in the local property industry, especially the housing sub-sector. The gloom that enveloped the market scene a year ago was dispelled from the second half of 2009. Buying activity was no doubt boosted by fear of inflationary pressures as well as the low interest rate regime and innovative mortgage schemes hatched up by both developers and bankers.
The market’s unexpected resilience has prompted new launches. Those in popular locations and by credible developers were snapped up, with queues lining up for the units. Developers on the prowl for cheap land were left disappointed — and they will continue to stay disappointed.
Positive sentiment can be expected, and it will be more pronounced in the first half, helped in part by the government’s stimulus packages and accommodative monetary and fiscal policies. Developers who had put off launches can be expected to make their move for a piece of the action. While they will attempt to be bolder with launches, they must not take buyers for granted. The ground remains shaky although real estate values in Malaysia have gone up merely in tandem with inflation and wage growth. As for buyers, forget about waiting for prices, especially at popular locations, to come off — that isn’t going to happen what with inflationary pressures and rising costs.
Key to competition in 2010 will be innovation. From architecture to internal aesthetics, landscaping to mortgage financing, successful developers can be expected to invest more to come up with the USP — unique selling point — of their projects. Innovation is not about being the biggest or the tallest. Taipei 101 has just been displaced by the Burj Khalifa as the world’s tallest building, but now aspires to be the highest green structure on the globe, according to a report by Reuters.
Innovation is about being able to retain the attractiveness and appeal of a project beyond its colourful launch hype. The ultimate test lies in whether a developer has the ability to create value for buyers.
Health and safety
On a related issue, the responsibility for creating and maintaining clean and safe liveable spaces does not rest on the shoulders of developers alone; local authorities must also live up to public expectations and scrutiny.
The Klang Valley is not only a hotbed for property investors but rats and crows too. We must never let our guard down when it comes to pests that can undermine the nation’s health and prosperity. Recall the severe acute respiratory syndrome epidemic in Hong Kong not that long ago?
A pair of rats will multiply quickly and filth on the streets provide ideal breeding grounds. Serious efforts must be taken to arrest the problem before it gets out of hand.
What good is a thriving city if rats and other disease-bearing pests are listed among its noteworthy features?
Au Foong Yee is editor of City & Country and haven — a bimonthly interior design and gardening magazine published by The Edge, and theedgeproperty.com
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 788, Jan 11-17, 2010.
TOP PICKS BY EDGEPROP
You Buy property , We help you pay Installments !!
Nilai, Negeri Sembilan
2 Sty Semi D Tmn Tasik Semenyih, Semenyih
Cyberjaya DUAL KEY CONDO FREE FURNISHED+RENOVATED
Welcome FIRST HOME BUYER & INVESTOR! Cash Back 30k
Double Story Corner Lot Taman Warisan Putra Fasa 2
BELOW MARKET 2 Sty Terrace Eco Majestic Semenyih
[Salak Tinggi KLIA] Buy 1 Get 2 Studio ROI 9%
Cheras Semi D Below Market Price Left *7Units*
Cheras, Kuala Lumpur
Double Storey Terrace, Alam Sari, Bangi
You buy Property , We Help you pay installments !
Mont Kiara | Freehold 3R2B Below Market Price
Mont Kiara, Kuala Lumpur
Residence [email protected] [Foc Mot & Free Furniture]
Bandar Botanic/Bandar Bukit Tinggi, Selangor