Why Now is the Ideal Time to Invest in Off-Plan Properties in Dubai

The off-plan property market in Dubai is experiencing remarkable growth, making it a prime opportunity for investors. Here's why it's the right time to buy off-plan properties.

Introduction

The off-plan property segment has emerged as a driving force behind the upward trajectory of Dubai's real estate market. The sustained demand for off-plan properties reflects the market's robust growth potential in the foreseeable future.

Rising Dominance of Off-Plan Properties

The off-plan segment now constitutes a significant portion of Dubai's real estate market, accounting for 58% of total sales transactions and 50% of the total transaction value in August.

Year-on-year, off-plan property sales surged by 63%, with 6,837 transactions recorded compared to 4,189 in August 2022. In terms of value, off-plan properties witnessed an astonishing 103% increase, reaching Dh17 billion, well above the Dh8.26 billion recorded in August 2022.

Key Areas for Investment

Ten areas, as identified by Property Finder, contributed to nearly 65.3% of the total sales value and 53% of the total number of off-plan transactions. These include perennial favorites like Business Bay, Dubai Harbour, Dubai Creek Harbour, Jumeirah Lakes Towers, and Jumeirah Village Circle, along with newcomers such as Sobha Heartland, Al Yufrah 1, Arjan, Jumeirah Village Triangle, and Madinat Al Mataar.

Prominent Off-Plan Transacted Areas

According to Betterhomes, the top five off-plan transacted areas in September were Dubailand, Mohammed bin Rashid City, Jumeirah Village Circle, Business Bay, and Dubai Marina.

The off-plan market is witnessing an unprecedented surge, as noted by Cherif Sleiman, Chief Revenue Officer at Property Finder.

Resilience in the Post-Pandemic Period

The local property market has seen a renaissance in the post-pandemic period, with strong demand for both apartments and villas. Many industry players anticipate that the off-plan market will continue to dominate the local property market, despite a slowdown in the secondary market.

Off-Plan Projects Abound

To meet this growing demand, both public and private developers have aggressively launched projects. In 2023 alone, over Dh110 billion worth of projects have been launched in Dubai. These include Emaar's Dh73.4 billion "The Oasis" and Azizi Developments' Dh30 billion mixed-use desert oasis community project, "Venice."

Private developer Danube Properties launched five projects in 2023, with its first tower, "Oceanz," selling out soon after the launch. Nakheel Properties' first set of villas on the Palm Jebel Ali was also launched and sold out on the first day.

Unprecedented Demand

Many of the newly-launched projects have been sold out, indicating strong foreign and resident interest in promising returns. This surge in demand has attracted foreign developers to the local market, offering diverse offerings to buyers.

Why Invest in Off-Plan Properties Now ?

Buying off-plan properties provides several advantages. Firstly, they are available at lower prices compared to completed units. Additionally, off-plan properties typically offer flexible payment plans, which can be advantageous for investors.

In the current market, investing in off-plan properties is especially attractive for several reasons:

1. Impact of Rising Mortgage Rates: The rising mortgage rates have made ready properties less viable for investment due to increased servicing costs. This has resulted in diminished net yields for ready properties.

2. Allocation of Funds: Off-plan investments allow investors to allocate funds toward properties still available at their original prices. Flexible payment plans help mitigate the impact of high lending rates.

3. Population Growth: Dubai's population growth is a key factor driving the demand for residential properties. This trend indicates sustained demand for rental properties.

Positive Outlook

With Dubai's ongoing development and population growth, off-plan properties have significant potential for appreciation in value by the time they are completed. The outlook for Dubai's off-plan market is promising, with a notable surge in interest from both foreign and local property buyers.

Key Considerations for Off-Plan Buyers

Before investing in off-plan properties, it's essential to evaluate the reputation and track record of the developer, understand payment plans, associated costs, and legal safeguards, conduct thorough research, check online prices, and seek guidance from trusted consultants.

Hot Areas for Off-Plan Properties

Business Bay, Dubai Harbour, Dubai Creek Harbour, Jumeirah Lakes Towers, Jumeirah Village Circle, Sobha Heartland, Al Yufrah 1, Arjan, Jumeirah Village Triangle, Madinat Al Mataar, Dubailand, Mohammed bin Rashid City, and Dubai Marina are among the hot areas for off-plan investments.

In conclusion, the demand for off-plan properties in Dubai is booming, making it the right time to consider investing in this thriving real estate market. However, it's essential to conduct thorough research and consider key factors before making your investment decision.

FAQ: Is it a good time to invest in off-plan properties in Dubai ?

Q1: Why is the off-plan property market in Dubai considered a good investment opportunity?

A1: The off-plan property market in Dubai is thriving due to its competitive pricing, flexible payment plans, and the potential for property value appreciation upon completion. Investors can secure properties at lower prices and with favorable payment terms, making it an attractive choice.

Q2: How does off-plan investment compare to investing in ready properties?

A2: Investing in off-plan properties can be advantageous compared to ready properties, especially in the current market. Rising mortgage rates have impacted the viability of investing in completed units. Off-plan properties offer original pricing, flexibility in payment, and an opportunity to secure properties at their pre-handover value.

Q3: What is driving the demand for off-plan properties in Dubai?

A3: Dubai's population growth, government initiatives, and attractive payment plans have contributed to the demand for off-plan properties. These properties are particularly appealing for investors looking for sustainable returns.

Q4: What should I consider before investing in off-plan properties?

A4: Before investing, consider the reputation of the developer, payment schedules, associated costs, and contractual safeguards. Research thoroughly, check online prices, and seek guidance from trusted consultants to make an informed investment decision.

Q5: Are there specific areas in Dubai that are particularly attractive for off-plan investments?

A5: Yes, several areas in Dubai are hotspots for off-plan investments, including Business Bay, Dubai Harbour, Dubai Creek Harbour, Jumeirah Lakes Towers, Jumeirah Village Circle, Sobha Heartland, Al Yufrah 1, Arjan, Jumeirah Village Triangle, and Madinat Al Mataar.

These areas offer promising investment prospects.