According to property market consultants, the off-plan market in Dubai has a promising outlook, as it has seen a notable increase in interest from end-users and investors.
The number of local and foreign property buyers has increased by almost 40% to 60% due to which the off-plan market in the emirate is booming.
Analysts at Betterhomes said that the off-plan market showed a positive trajectory in its overall landscape.
But, they also added that that the real estate market can be influenced by a number of factors and there might be a shift in trend over time.
They said that in the last three months, there had been a surge in demand in the off-plan property market by almost 35%, as compared to the same period in the previous year.
Furthermore, the analysts also revealed that transactions in the off-plan market now made up about 61% of the total transactions in the overall real estate market in Dubai.
In the second quarter of this year, the total value of off-plan transactions in Dubai were valued at Dh34 billion, which is a 750% increase from the deals registered back in 2020 in the same period at Dh4 billion.
A report from Zazen Properties showed that this was an increase in transactions of about Dh30 billion in just a period of four years.
Property Monitor also published a report recently, which showed that as of August this year, the highest market share had been contributed by off-plan sales, as they make up about 64.7% of the market.
There was an 8.1% increase in the total volume of sales transactions month-on-month, as the total number of sales reached 12,134.
This was the highest ever volume that has been recorded for the month of August.
According to property market experts, there are several reasons why it is the best time forinvesting in off-plan properties.
First off, the viability of buying ready properties for the purpose of investment has been altered due to rising mortgage rates.
Even though rental yields have gone up, there has also been a rise in costs of servicing a mortgage, which means net yields have diminished after all the expenses are factored in.
Therefore, it is less favorable to invest in ready properties for now. In addition, with off-plan properties, investors are at an advantage.
They are able to allocate their funds to properties that are still available at their original pricing. Since the payment plans are flexible, the impact of high lending rates can be mitigated.
This helps investors in managing their finances in a better way. Moreover, the population growth in Dubai is also serving as an important catalyst in driving up the demand for residential properties.
Due to the ongoing development taking place in Dubai and the steady increase in population, there is a significant potential associated with off-plan properties when it comes to appreciation in their value.