Sign in
Sign up
.jpeg)
This year the demand for off-plan properties will continue to increase, especially with foreign investors coming for Expo 2020.
The value of off-plan property transactions in Dubai has reached an eight-year high after months of sluggish growth. Buyer interest to pre-construction projects has started to increase again.
In August, total sales stood at USD 1.3 billion, which is the highest result seen in one month for off-plan residential units since December 2013, says the real estate platform Property Finder. In addition to that, August recorded 2,599 sales transactions, the highest number in a calendar month since November 2019.
Last year sales of properties marketed prior to the start of construction dropped significantly as most of the buyers preferred completed communities. Moreover, developers held back launches of new projects amid COVID-19 restrictions and subdued demand.
'During the pandemic year, the off-plan market significantly declined. The average was about 30 percent of properties sold were in the off-plan segment. Today, we have bounced back to 2019 ratios where secondary and off-plan segments are almost 50/50,' noted Lynnette Sacchetto, director of research and data for Property Finder.
But not only the number and value of transactions have increased, more buyers are now ready to acquire properties of higher value. In August, buyers spent USD 517,281 per transaction on average, a rise of 53 percent from USD 326,704 in the same period last year.
As for off-plan apartments, their average price in August was USD 299,478, 48 percent higher compared to USD 202,965 a year earlier. Villa/townhouse median price per transaction increased to USD 490,056 from USD 435,605 over the same period.
In Sachhetto's opinion, this year the demand for off-plan properties will continue to increase, especially due to the increased influx of investors expected during the Expo 2020 event in Dubai.
As of this month, 34,000 new properties have been completed in Dubai. The most part of the additional supply, 26,000 units, are from apartment projects, villa and townhouse developments include only over 6,000 new units.
'Now the question is, will there be enough stock available to sell in the off-plan market to fulfil investor demand, especially with foreign investors coming in over the next six months for Expo 2020?' Sacchetto pointed out.
According to Asteco's report, as of June 2021 Dubai’s residential supply included 22,500 apartments and 2,000 villas. The report also noted that the emirate has seen an increased number of new projects launches, including off-plan, under construction and completed developments.
'Although new supply slowed as a result of recurring COVID-19 linked restrictions and delays, it still presents a significant volume,' Asteco said.
Dubai’s leading developers, including Emaar, Majid Al Futtaim, Union Properties and Azizi Developments, have also unveiled villa, townhouse and apartment projects that are either being developed or have just been launched.
