Abu Dhabi and Dubai have seen a huge increase in off-plan property transactions which have heavily contributed to the UAE’s real estate market boom, signalling investor confidence.
“The continued growth in off-plan transactions, rising demand for quality office spaces, evolving retail offerings, and transformative renovations in the hotel sector, collectively indicate the dynamism of Dubai and Abu Dhabi as vibrant investment destinations,” Faraz Ahmed, Associate, Research at JLL MENA, said in a statement on Tuesday.
“With strong investor confidence, robust absorption of new projects, and innovative developments, there is no doubt that these cities are paving the way for sustained growth and transformation across the entire real estate landscape in the UAE.”
Dubai off-plan transactions
During the second quarter, Dubai’s off-plan residential sales increased by 38 percent in value and 30 percent in volume compared to the same period in 2022, according to data from Dubai Pulse.
Around 57 percent of the transactions in the category were recorded between AED500,000 and AED2 million, with investors primarily focusing on studio apartments and 1-bedroom units in Dubai districts Jumeirah Village Circle, Dubailand, and MBR City.
Abu Dhabi off-plan transactions
Abu Dhabi’s off-plan market also demonstrated a very strong performance throughout Q2.
The value of off-plan transactions more than doubled in the UAE capital to AED3.8 billion, up from AED1.8 billion during the same period last year. The majority of the investor activity seemed to be concentrated between AED2 and 3 million and was driven by villa transactions on Al Reem Island and Yas Island.
Soaring off-plan transactions fuel property market boom
In the past, many have shied away from purchasing off-plan properties due to concerns about project cancellations, incomplete developments, and challenges in obtaining refunds.
But real estate experts told Arabian Business on Monday that buying off-plan can be a lucrative investment strategy as Dubai’s population skyrockets, meaning that the demand for rentals will only continue to surge.
Off-Plan Manager at Dubai-based real estate agency Betterhomes, Kulwant Khurana, told Arabian Business that now is a “great time to invest in off-plan properties,” but cautioned that investors and potential buyers must weigh the risks.
“Dubai’s population growth serves as a crucial catalyst driving the demand for residential properties. The UAE government has implemented various initiatives to foster population growth in Dubai, attracting a steady influx of individuals,” he said.
“Buying off-plan allows you to purchase a property at a lower price compared to completed units and as Dubai continues to develop and expand, there is potential for the value of off-plan properties to appreciate by the time of completion.”
Before buying a property, Khurana advised that buyers should not only choose a reputable developer, but also evaluate the location, understand the payment plans and associated costs, and review legal and contractual safeguards.
People looking to invest in an off-plan property need to evaluate the reputation and track record of the real estate developer to ensure that the project is more likely to be completed on time and at a good quality. Knowing the developer’s history can help mitigate the risks associated with delays, project cancellations, or substandard construction.
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