Off-Plan Properties in Dubai have emerged as the frontrunners in the real estate arena, marking a remarkable resurgence after a relatively quiet 2020. Pre-handover sales have experienced an astounding surge, witnessing an eight-fold increase in recent years, contributing to over half of all real estate transactions.
The off-plan property sector in Dubai is currently experiencing an exciting boom, with strategic keyword placement for “off-plan properties in Dubai” enhancing its online visibility.
AED34 Billion in Q2 2023: Off-Plan Transactions Soar
During the second quarter of this year, Dubai recorded off-plan transactions worth a staggering AED34 billion ($9.3 billion), showcasing an impressive 750% growth compared to the AED 4 billion deals registered in the same period in 2020.
Notably, this represents an incredible AED30 billion increase in transactions over just three years, as reported by Dubai-based developer Zazen Properties.
Attractive Factors Driving Growth
Affordable pricing in the off-plan property segment and the promise of higher return on investment (ROI) from properties under construction have been the driving forces behind this phenomenal growth.
Madhav Dhar, COO and founding member of Zazen Properties, emphasized the attractiveness of off-plan real estate, especially during construction, due to its significantly lower cost compared to ready properties.
Booming Residential Supply
The second quarter of 2023 witnessed an outstanding increase of AED30 billion ($8.17 billion) in off-plan property sales transactions compared to the same period in 2020.
This surge comes at a time when the emirate’s total residential supply has reached approximately 517,849 units by the end of H1 2023. Additionally, an impressive 142,644 units are currently under construction, as reported by Zazen Properties, a prominent sustainable property developer in Dubai and the UAE.
Population Surge Fuels Expansion
Dubai’s population is on a rapid trajectory to triple by 2025, up from 1.3 million in 2005, resulting in a significant increase in residential supply, particularly in recent years.
Industry analysis indicates that 60,000 units are slated for delivery in 2023, with approximately 20,000 of these units already completed. Furthermore, the market is expected to see an influx of nearly 80,000 units in 2024 and 2025.
From Slowdown to Market Dominance
The off-plan property segment experienced a period of sluggish performance after the easing of COVID-19 restrictions in 2020, with most buyers favoring completed or secondary units at that time.
However, as of August this year, off-plan sales have reached their highest market share since the pandemic’s onset. Off-plan sales now account for an impressive 64.7% of the market, according to a separate report by Property Monitor.
Record-Breaking Transactions in August
The report highlights that “off-plan sales last held a dominant market share of this level only briefly in April 2020 when the COVID-19 pandemic limited the ability to transact completed properties due to mobility restrictions and the temporary closure of Trustee offices.”
This resurgence has led to an 8.1% month-on-month increase in the total volume of sales transactions, totaling an unprecedented 12,134 sales and setting a new record for the month of August.
Year-to-date, the real estate market has witnessed more than 85,000 deals recorded, representing a substantial 41.9% increase over August last year and an impressive 125% increase compared to 2021.
Property Monitor attributes this surge to “new development project launches and the sale of off-plan properties,” recognizing them as significant drivers of transaction activity in 2023.
Bright Future Ahead
Dubai’s off-plan properties market has made a remarkable comeback, with AED34 billion in transactions during Q2 2023, driven by affordability and promising ROI.
As the emirate’s population continues to grow, this thriving sector is poised for further expansion in the years to come, solidifying its position as a dominant force in the real estate market.
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