The Dubai off-plan real estate market is experiencing a significant surge in demand

The Dubai off-plan real estate market is experiencing a significant surge in demand

The Dubai off-plan real estate market is experiencing a significant surge in demand, making it an attractive prospect for both investors and end-users, according to property industry experts.

This flourishing off-plan market indicates a favorable environment for real estate investment within the emirate. In recent times, there has been a noteworthy increase in foreign and local property buyers, with numbers surging by 40% to 60%.

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“While the current landscape paints a promising picture for the off-plan market in Dubai, it’s essential to keep in mind that real estate markets can be influenced by various factors, and trends may evolve over time,” noted analysts from Betterhomes.

The off-plan property sector has seen a remarkable 35% increase in demand over the past three months when compared to the same period the previous year. Remarkably, off-plan transactions now constitute a substantial 61% share of Dubai’s overall real estate market, as per analysts’ reports.

In a striking contrast, Dubai’s off-plan sales for the second quarter of this year reached Dh34 billion, marking a remarkable 750% increase from the Dh4 billion recorded during the same period in 2020. Zazen Properties’ research showed a surge of approximately Dh30 billion in transactions over the past three years.

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As of August this year, off-plan sales took the lion’s share of the market, accounting for 64.7% of the total. In fact, August witnessed the highest number of sales transactions ever recorded for the month, with a total of 12,134 sales, an 8.1% increase month-over-month.

Real estate experts suggest that the current market conditions make it an excellent time to invest in off-plan properties for several compelling reasons. “First, the shifting landscape of rising mortgage rates has altered the feasibility of purchasing completed properties for investment. Despite increased rental yields, servicing a mortgage has become costlier, leading to reduced net returns after factoring in all expenses,” they explained.

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“Consequently, investing in completed properties for returns has become less attractive. Second, off-plan investments offer a unique advantage by enabling investors to allocate funds to properties still available at their original prices. The flexibility of payment plans helps mitigate the impact of high lending rates, ensuring greater financial adaptability. Third, the increasing population in Dubai serves as a crucial driver for the demand in residential properties.”

According to Betterhomes’ analysis, off-plan properties stand a strong chance of appreciating in value by the time they are completed, thanks to Dubai’s continual growth and steadily rising population. “Purchasing off-plan properties allows investors to buy real estate at a lower price compared to completed units. Furthermore, off-plan properties often come with flexible payment plans, which can be advantageous for investors,” highlighted the report.

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The Dubai off-plan real estate market, with its soaring demand and robust investment potential, appears to be on a promising trajectory. It’s certainly an exciting time for those looking to venture into Dubai’s dynamic property landscape.

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