The Surge in Off-Plan Sales: Insights into Dubai Property Market

The second quarter of the property market in Dubai has witnessed a tremendous surge in off-plan projects. This increase is the result of Dubai's dynamic landscape, which allures investors from around the globe.

The property sector comprises different segments, but the commendable increase in off-plan sales in real estate has demonstrated a significant interest of investors in new projects.

This segment accounted for 63% of overall property sales, whereas a 5% increase has been observed in launched projects. The continuous growth will project Dubai as a global leader in popular residences by 2029.

Moreover, the Dubai property market is experiencing dramatic transactions, with 212% year-on-year growth. The article weaves the network and intricacies of off-plan sales in Dubai, extending essential information for investors based on real-time data and trends.

We will explore the prime aspects of off-plan sales, emerging trends, current updates in the Dubai property market, and factors playing a role in the highest ROI in the region.

off plan sales

Understanding Off-Plan Sales in Real Estate

Off-plan sales refer to the properties that are sold before the project is completed. The aim is to buy these properties based on their designs and architectural planning, leading to lower prices than the completed ones and, thus, benefitting investors.

Off-plan sales allow property developers to secure funding for their developments, whereas buyers gain potential advantage of capital appreciation during the construction phase. These are the advantages: encouraging more people to invest in off-plan projects in Dubai;

Off-plan properties are generally offered at lower rates than the market prices of ready-to-use units, providing investors with an edge and allowing them to gain higher ROIs.
Off-plan properties are more flexible and can be modified according to buyers' preferences.
Properties purchased before completion may lead to capital appreciation by the time of project completion.
Off-plan sales allow buyers to feasibly finance their payments throughout the construction period, which reduces the burden of financial strain.

Dubai Property Market Update 2024

Current Market Overview

As of 2024, the property market in Dubai has been undergoing a robust increase in transactions, which is mainly due to the city's innovative infrastructure, strategic location, and investor-friendly initiatives. These factors synchronously attract international investors and local buyers alike.

The increase in the demand for off-plan projects has also hiked the prices of off-plan properties by an average of 10-15 percent. The report is revealed by industry experts who demonstrated a strong trajectory in Dubai's off-plan market.

2024 expects 52,000 completion of off-plan developments, while 78,361 new units have recently launched. Real Estate Dubai is in no mood to slow down as 300,000 residential spaces are yet to be completed, marking an ever-rising state of the off-plan segment. Key highlights of the present market trends include;

Growing Demand: The noticeable increase in demand for residential properties has surged the residential market growth by 26.3%. The continuous inflow of expatriates and economic growth has boomed the market.
Prices Soaring: Property prices in prime locations have showcased an upward trajectory, accelerating the prices by 20.14%. However, the trend reflects market stability and buyers' firm confidence in the Dubai property market.
Government Initiatives: The government of the UAE has been continuously forwarding programs like Blue Visa, Golden Visa, and Green Visas. This act continues to pour in the demands and ultimately boosts property transactions.

1. JVC

JVC retains its popularity in off-plan projects as 3,102 deals are finalized, accounting for AED 2.95 Billion ($805 Million). This rise continued for the fourth consecutive quarter; however, the prices surged per square foot up to 5-12% in contrast to the early year.

Jumeirah Village Circle contributes significantly to Dubai's Real Estate Market by continuously launching new developments. Investors are guaranteed the highest ROIs in District 10 of JVC, where apartment prices vary between AED 250,000 and AED 2.6 million.

2. Business Bay

The top trending area in the Dubai property market, witnessing transactions of around 1,863 deals. The overall sale accounts for AED 4.8 Billion ($1.4 Billion), while the average ROI remains constant at 7.8%.

Investors are likely to be attracted to luxury projects such as Bayz 101 and Jumeirah Living Business Bay. The future of Business Bay demands a launch of 20,000 new residential units.

3. MBR City

MBR City's potential growth comprises total deals of around 1,998 while the sales value accounted for AED 2.4 Billion ($664 Million). By 2028, 19,845 residential units are expected to be delivered with Sobha Hartland and Dubai Hills Estate's most demanding projects.

Such developments gained popularity because of their 1- and 2-bedroom offerings, leading to an increase in prices of up to 15% to 17%. Other notable developments in MBR City include The Waterway and The Crest at Sobha Hartland.

4. Dubai South

Following the expansion of Al Maktoum International Airport, Dubai South saw a tremendous surge in the transactions of villas and townhouses, with an increase of 360% and 75%, respectively, YoY.

In contrast, apartments still lead in sales, accounting for 91% of sales value. In future years, we are yet to expect an addition of 14,000 units in Dubai South.

Dubai's Trending Neighborhoods

Emerging Property Trends in Dubai, 2024

1. Luxury Segment Growth

The luxury property segment is experiencing a significant boom as high-net-worth individuals seek premium units in strategic locations in Dubai.

The skyrocketing prices of luxury properties reached up to $10 million, yet 105 luxury homes were sold in the first three months of the current year.

This surge is approximately 6% higher than the record in the same quarter of the previous year. This shows how the prime residential markets are growing rapidly amid the dwindling supply.

2. Integrated Smart Communities

Industry experts demonstrate the growing demand for integrated smart communities, especially amongst international investors.

The current evolution of property dynamics has allured buyers to seek long-term residency in communities that feature world-class amenities, entertainment venues, and recreational options.

Some off-plan projects integrating smart-home technologies include;

IVY Gardens 2 by SAMANA Developers at Dubailand.
Aeternitas by London Gate & Frank Muller at Dubai Marina
Sky Tower by Tiger Properties at Business Bay
One by Binghatti at Business Bay
BAYZ 101 by Danube Properties at Business Bay

Districts like Dubai South, Downtown Dubai, Business Bay, and Dubai Marina are seamlessly integrating innovative features in new property launches to bolster the investors' attraction.

These districts offer a work-life balance with plentiful facilities, allowing the residents to live a comfortable and luxurious lifestyle.

3. Increasingly Popular Suburban Villas and Townhouses

Dubai is a city of skyscrapers, renowned for its high-rise buildings; however, the growing demand for low-rise developments has overtaken the race.

Developers are constantly bringing new luxury and affordable villas and townhouses to align with the demands of expatriates because of their long-term residency goals in Dubai. Following are a few examples of new launches;

The Oasis by Emaar features 4 and 5-bedroom villas with waterfront views, which is constantly driving investors’ attention.
Violet by Damac promises a premium collection of 4-bedroom townhouses while integrating sustainable features.
Investors and residents are also considering Riverside by Damac Properties as the development boasts an exceptional sanctuary where they can enjoy the riverside havens.

Areas like Dubailand, Jumeirah Village Circle, and Dubai South are farther from the city center but are still popular because of the expansive units available here. Such areas are prioritized by expatriates who migrate with their families, leading to advanced connectivity through new metro lines.

Dubai Property News: Latest Announcements

1. Infrastructure Projects

The continuous expansion of districts and projects demands new metro lines and road networks. Infrastructure development is mandatory to boost property values in developing areas by showing strong connectivity to the city center.

The recent expansion of Al Maktoum International Airport is set to project a significant impact on the real estate of Dubai. The areas that will see immediate impacts in the land values due to the airport include; Dubai South and Expo City. Moreover, Jebel Ali, Dubai World Central, and Dubai Investment Park will experience more residential developments because these areas lie in proximity to the airport.
Furthermore, the accessibility of the Blue Metro Line expects a 25% rise in rental and property prices, making the residential projects more investment-driven. This infrastructural development will ultimately result in more off-plan unit launches, having a notable effect on both demands and prices.

2. Major Developments

Various high-profile developments have been launched, including waterfront projects, multi-functional properties, and sophisticated urban districts. Beachgate by Address, Emaar Mangrove, and Binghatti Phantom are some off-plan projects designed to cater to luxury demands.

Other major developments include Mira Villas at Meydan, Hyde Residences in Dubai Al Satwa, and Altus at Dubai Creek Harbour. The continuous launch of major developments in Dubai has become a major reason for surging off-plan sales.

This surge is constantly increasing because investors are attracted to the unique features and lucrative potential these projects are offering.

Dubai Property News

High ROI in Dubai: Top Areas for Investment

Investors seeking the highest ROI are obliged to consider the following neighborhoods:

1. Business Bay

One of the well-regarded communities to gain lucrative outcomes is Business Bay. The sophisticated style, accessibility to major highways, and commercial-centered approach have hailed the community as the top investment option. The executive towers offer an attractive 6% ROI, on average, but it increases for short-term rentals.

2. Dubai Marina

Holding a stimulant position in Dubai's real estate sector, Dubai Marina is a popular tourist and residential community, boasting high rental returns with increasingly growing demand. On average, Dubai Marina yields an ROI of 6.43%, making it highly attractive for property investors.

3. Downtown Dubai

The area is renowned for its staggering landmarks, such as the Burj Khalifa, Dubai Mall, and Dubai Fountain, which generate strong potential appreciation and rental yields for both buyers and investors.

According to experts and stats of recent transactions, the average ROI in the vicinity ranges from 5 to 7%, depending upon the type of property, location, and amenities.

Practical Tips for Off-Plan Investment

Understand Payment Plans: Before making an investment, consider the payment plan to determine whether the project falls within your financial capacity. Analyzing investment strategy is essential to meeting your return on investment goals.
Research on Developers: Go through the developer's portfolio to investigate the project quality and handover timeline.
Review Contract Terms & Conditions: Thoroughly scrutinize purchase and sales agreements and focus on clauses relevant to penalties for project delay, construction handover details, and refund laws.
Evaluate Market Trends: Assessing projected and current market trends is preliminary to stay informed regarding the best investment opportunities and stimulated returns.
Hire an Expert: The dynamic nature of Dubai Real Estate continues to evolve; therefore, it is better to hire experts before investing in any project. The real estate agents/ brokers are proficient enough to ease the property-finding process. A broker understands the market trends and can guide you regarding RERA laws when buying a property in Dubai. Moreover, these brokers are typically licensed by DLD, which further builds trust among buyers and investors.

Closing In

The increase in off-plan sales in Dubai offers lucrative options for both end-users and investors. In the coming 6 months, Dubai off-plan sales may experience property hikes of up to 10 to 15 percent. This hit is caused by the growing demands from international investors and looming construction costs.

Though industrial experts have cautioned regarding the impact of higher property sales on the long-term Dubai property market, the popularity remains sustainable due to the confidence of investors.

The continuous residential registrations in Dubai have demonstrated the triumph of the off-plan property segment. Moreover, investor-friendliness and dynamism are potential factors constantly driving global investors to make this city their home.

Navigating the dynamic state of Dubai's off-plan investments, staying tuned with the updates on market trends, and indulging in thorough due diligence are essential for securing the highest returns on investment.

Investors can capitalize on the prosperity to achieve sustainable returns in the prime center of the Emirates. The shift in demographic profiles has also transitioned the interest of investors from congested city spaces to integrated suburban areas.

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