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Dubai's off-plan project market expects further growth, while the finished real estate market should slow down and reach a plateau. This forecast for the results of May is given by analysts from Dubai, based on several factors.
Experts believe that the off-plan real estate market will continue to grow due to the multitude of new houses under construction. Due to the recovery of the market after the pandemic, developers today are launching more and more new projects without fear of difficulties. These new projects, in turn, attracted the attention of investors, which led to an increase in prices in certain areas of Dubai.
Content:
In the new conditions
Today it is possible to observe a situation when in one area the price of a square meter in houses under construction noticeably exceeds the price of a square meter of finished real estate.
As an example, experts call the relatively young Arjan district (Arjan). Here, the price per square meter in projects under construction averages AED 13,638 ($3,713), and in finished houses - about AED 9,160 ($2,924). This situation developed after several large developers; for example, Samana Developers launched several new projects in the area.
In recent months, a record number of new construction projects from a variety of developers have started in Dubai. Several larger projects will be launched before the end of the year. It is noteworthy that the share of 23.6% of the entire off-plan real estate market is made up of ultra-expensive residential complexes.
As a result, analysts predict that prices for off-plan real estate will continue to grow.
What will happen to the new buildings?
Experts believe that among the ready-made projects, only the niche of ultra-expensive luxury real estate will grow steadily. Specific conditions have been formed in it for a long time and it has turned into a full-fledged micro-market.
Otherwise, the finished real estate market should slowdown in growth. This is especially true for the segment of villas and townhouses, where there has already been a downward trend.
In May 2023, off-plan real estate overtook the finished one in terms of the number of transactions. About 6 thousand transactions totaling AED 16 billion ($4.36 billion) were made with off-plan projects. There were 52 transactions with finished real estate, totaling AED 12.29 billion ($3.35 billion).
Prospects after May 2023
According to the overall results, May 2023 was a record for the Dubai real estate market. During the month, 11,757 transactions were made for a total amount of approximately AED 34 billion ($9.26). This is 76% more than in May 2022. If we talk about individual segments, then it follows:
- 8,862 apartments were sold, which is 88% more than in May 2022.
- 2014 deals were made with villas - this is 40% more than in May 2022.
- among all transactions, 2,872 are related to mortgages totaling AED 10.6 billion ($2.29 billion) - this is 71% more transactions than in May 2022.
Such data was collected by the Dubai Land Department.
Analysts expect that against the background of such indicators, the active investments of investors from the Far East will help the further growth of the Dubai real estate market. This is especially about China. It was Chinese investors who led the market before the coronavirus pandemic and can now regain their former positions.
