Rising Demand Boosts Dubai’s Off-Plan Real Estate Sector
In the past three months, the off-plan property market has seen a remarkable surge in demand, witnessing a substantial 35% increase. This surge in demand in Dubai’s off-plan real estate market is a noteworthy development, and experts at Betterhomes highlight the positive trajectory it’s following. Nevertheless, they also acknowledge that real estate markets are susceptible to various factors that can lead to evolving trends over time.
The 35% surge in demand for off-plan properties stands out as a remarkable increase when compared to the same period in the previous year. Currently, off-plan properties account for a substantial 61% of Dubai’s overall real estate market.
During the second quarter of this year, Dubai recorded off-plan transactions amounting to Dh34 billion, marking a staggering 750% increase from the Dh4 billion in transactions reported in the same period in 2020. This remarkable growth equates to an additional Dh30 billion in transactions over the span of three years, according to a report by Zazen Properties.
A recent report from Property Monitor reveals that as of August this year, off-plan sales make up 64.7% of the market, with the total number of sales transactions reaching 12,134. This figure represents a record high for the month of August, depicting an 8.1% month-on-month increase.
Experts in the property market suggest that the current environment is favorable for investing in off-plan properties for several reasons. Firstly, the rising mortgage rates have made investing in completed properties less attractive in terms of returns. Despite increased rental yields, the higher costs associated with servicing a mortgage have diminished net yields.
Secondly, off-plan investments offer a unique advantage by allowing investors to allocate funds to properties available at their original prices. The flexible payment plans associated with off-plan properties help mitigate the impact of high lending rates and provide enhanced financial flexibility.
Lastly, Dubai’s population growth remains a significant driver of demand for residential properties, making off-plan investments a promising choice for potential appreciation in value upon completion. Purchasing off-plan properties typically involves lower initial costs compared to completed units, and the flexible payment plans offered can be beneficial for investors.
Dubai’s off-plan real estate market thrives due to increasing demand, attractive investment opportunities, and the region’s sustained development and population growth.