Dubai Real Estate Market witnessed significant growth in 2022 as Property sales transactions rose by 76.5%
Dubai’s Off-plan segment was particularly a bright spot with an eye-popping 144 percent surge in performance which contributed to the UAE’s overall real estate boost. With another 115,000 units being constructed, 34,000 of which have reached or above 70 percent completion and are anticipated to be delivered by the end of the year, this optimistic outlook is predicted to last until 2023.
Despite factors that are known to spur economic downturns, like ongoing turbulence in Europe and a looming global recession, the UAE’s real estate sector has thrived as a result of changes in consumer behavior; one-third of the country’s population is aged between 20-30, and 90 percent of this group prefers to rent properties in the early stages of their careers, but many of these individuals who have been saving up are now prepared to invest in affordable off-plan developments.
The FIFA World Cup in Qatar had a huge effect on Dubai's off-plan market growth. The event gave attendees, many of whom were high-net-worth people passing through Dubai, a greater knowledge of what Dubai has to offer and why it is so well-known worldwide. Off-plan developments continue to be long-term and lucrative investments due to the UAE's ongoing media attention, and this growing interest in these unfinished homes can be related to a number of market variables, including:
The highest ROI (Return On Investment)
Off-plan purchases give investors a number of options to choose the best apartments currently under construction while allowing them to obtain a property as soon as feasible and at the lowest price. Also, the estimated down payment of 10% demonstrates to be a cost-effective choice, especially when contrasted with the usual cost of 20–25% linked with buying finished products.
An added element of affordability in the off-plan real estate space is the convenient payment structures that investors, and even end-users, can benefit from. Installation schemes can be split into a 40-60 allocation where the buyer pays 10% of the property cost upon signing, the balance 30 percent in installments over the construction period of 18 months, and 60 percent at handover. This lessens the financial strain of the investor and allows them to then structure rental contracts in a way that is still profitable for them but also attractive to tenants.
Upon the completion of a development, owners who rent out the unit they purchase are able to benefit from the UAE’s steady influx of ex-pats. Landlords can expect a guaranteed annual minimum net return of five percent even in upcoming areas of Dubai like Jumeirah Village and Al Furjan, which continue to be among the most attractive options for high-quality affordable housing.
Safety and regulations
Dubai’s Real Estate Regulatory Authority (RERA) has implemented a system of regulations to protect buyers against delays and project cancellations. A law introduced in 2017 safeguards buyers of off-plan real estate from developers who do not abide by their contractual obligations. Investors can accordingly buy off-plan properties with their best interests safeguarded at all times as installments are only deposited in regulated accounts, which developers can only access as they meet construction milestones.
Peace of mind
If an off-plan property is being bought for the purpose of eventually living in it, the owner can rest assured that they will be the first to enjoy their purchase. Just like the development itself, their apartment will be delivered to them brand new with a Defects Liability Period of one year, ensuring that the developer takes responsibility to rectify any defects that unfold. Additionally, developers and contractors have a 10-year obligation to safeguard the structure of the development.
Additionally, newer developments often come with upgraded designs, technology, and amenities For example, the first LEED Gold certified and Well-Being integrated development is currently under construction in Al Furjan; upon completion, ZaZEN Gardens will help residents live better through modern sustainable design, high-quality finishes, easy connectivity and a multitude of community focused amenities, aligning with Dubai’s 2040 Urban Master plan and UAE’s 2050 Net Zero commitment