Long queues to buy real estate in Dubai reminded many of the times before the pandemic when columns of buyers lined up for a good deal from various developers with an investment property.
Real estate experts say the resumption of this trend signals growing confidence among buyers and investors in Dubai’s housing market.
In the end, who doesn’t want to buy a villa in Dubai by the sea?
Off-Plan Real Estate In Dubai Gaining Popularity
In terms of specific areas and communities in Dubai, The Palm Jumeirah man-made island saw a 34% increase in property transaction value and a 221% increase in transactions. In comparison, the prestigious JLT area saw the highest growth in transactions at 262%.
Due to the absence of a large number of new property offers in the most popular areas of the city and prices at the level of 2011, there is a positive mood in the investment property market and, as a result, an increase in demand for existing properties.
But Dubai has a unique market where some of the parts of the city are performing better than the others. The villa segment has seen one of the highest levels of sales in recent months as people prefer more spacious living spaces with space for outdoor activities.
Dubai Is Gaining Popularity On The Real Eastern Developments
For their part, developers are returning to incentives for off-plan buyers, including extended payment plans, payment of fees and commissions, and discounts on service fees.
And it seems that investment property developers have begun to gradually return to launching new projects after a long period of freezing.
For example, Damac recently presented to the public a new branded property project from the Italian fashion brand Cavalli worth USD 545 million in Dubai Marina. It was the first project launched by the developer in a long time.
On the same day, another developer, Deyaar, confirmed an agreement with the general contractor to erect its ambitious 70-story Regalia Tower in Business Bay, which, when completed in 2024, will be one of the city’s tallest structures.
And real estate developer Union Properties has put up for sale a property in a cluster of three buildings in Motor City, where four-bedroom apartments are being sold at a highly affordable price of USD 480,000.
New Waves Of The Real Easter Off Plans
At the same time, according to investment property experts, these launches can only be an impetus for a new wave of off-plan real estate projects from developers, as buyers have become more receptive to offers and are ready to wait for the completion of projects under construction.
About 50% of home sales this year were concentrated in the following communities:
- Jumeirah Village (11%),
- Jumeirah Lake Towers (10%),
- Meydan One (9%),
- Dubai Harbor (9%),
- Business Bay (6%)
- And Sobha Hartland (6%).
Finished Or Off-Plan Projects In Dubai
This brings us back to the question that has come up every time the real estate market has experienced a boom in property sales in one category or another over the past ten years.
Which is better: to buy the ready-made investment property or under construction? As always, the answer lies in what the buyer wants and what price he is willing to pay. If we are talking about an apartment costing from USD 136,500 to 1 million, then ready-made housing will cost less than off-plan.
But if you are interested in buying a villa worth AED 10 million (USD 2.73 million), then the off-plan project will be a less expensive option. Because right now, ready-to-move-in villas worth AED 10 million or more are not delayed in the sale – there are not enough of them, and sellers keep the price.
Real Estate Price Growth Rates
According to the investment property finder, the average price of a real estate transaction under construction increased by 53% year-on-year from AED 1.24 million (USD 340,000) in August 2021 to AED 1.90 million (USD 520,000).
The average price of an apartment under construction in August last year was 745,500 dirhams (US$ 203 thousand), which has increased by 48% to 1.10 million dirhams (US$ 300 thousand).
And the average sale price of villas and townhouses under construction increased by 12% as it rose from AED 1.62 million (USD 440,000) to AED 1.81 million (USD 490,000) in those 12 months.
In the first half of the year, the average sales of finished villas in Dubai grew by more than 19.3%. Similarly, prices for off-plan villas rose by 9.3%.
In terms of finished apartments, their prices rose by 8.7% year by year, while the prices of the real estate-like apartments which are under construction also fell by an average of 9.5% compared to the same period last year.
The main change seen in the market now is the limited availability of projects from developers, which contrasts with the abundance of projects over the previous four years. Due to government restrictions on the launch of new projects, a limited number of housing developers are entering the market, which means that demand exceeds supply.
What About The Different Types Of Real Estate Property?
The most popular among buyers are real estate by the sea, townhouses, and villas. Seafront property is very often seen as an additional home and as an investment, while townhouses and villas are popular among residents who are looking for a home for themselves.
About 70% of buyers who prefer property by the sea are Europeans, while clients from South Asia and Arab countries make up 90% of those who prefer townhouses and villas.
The rise in sales of off-plan properties is also due to the fact that buyers have become more trustful of developers, thanks to the fact that funds are stored in escrow accounts (escrow) administered by the DLD, which gives people a sense of security.
It is easier for buyers to deal with developers than with an unknown seller in the secondary market. In addition, there is a lack of quality properties in the secondary market, and people prefer to buy new housing rather than apartments and houses aged 5 to 10 years.
The latest such incident was recently at the office of real estate developer Nakheel, which launched 360 units for sale as part of the second phase of the Murooj Al Furjan West project.
| Note: The new collection of townhouses in the Al Furjan community consists of three and four-bedroom homes with starting prices starting at AED 1.85 million (USD 500,000). |
Real Estate Agency In Dubai
Ax Capital agency specialists will gladly assist you in purchasing real estate in Dubai. Check out their website to find the latest offers on the market.
Finally, when analyzing the preferences of real estate buyers at the moment, one cannot help but dwell on the most eloquent fact in favor of the revival of the market at the current stage.
And it was the return of live queues of those wishing to purchase housing at a bargain price from developers.
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