Dubai’s real estate market breached yet another record in August this year, with off-plan sales surging to a whopping AED16.89 billion ($4.6 billion), almost double from the same year-ago period, latest industry data showed.
The spike in sales last month has led to vault the 2023 year-to-date sales in this segment by close to 63 percent compared to the whole of last year, according to data compiled by Allsopp & Allsopp, Dubai’s leading independent real estate agency.
The high profile of entry of some of the leading international brands in real estate including the UK’s LEOs Development and Switzerland’s Fortimo, whose fancy and high-end residential projects propelling a new round of surge in the influx of international investors to Dubai, is cited as among the major reasons for the big jump in off-plan sales this year.
“Over the past year, international developers from countries like the UK and Switzerland to name a few have relocated to Dubai, thereby increasing the supply in the property market,” Fintan Flannelly, Head of Developer Sales at Allsopp & Allsopp, told Arabian Business.
“These developers, both new and established, are not only executing projects locally but are also marketing to potential buyers outside of Dubai, capitalising on the high demand for property investment in the region,” Flannelly said.
Jumeirah Golf Estates, Mudon, Dubai South saw maximum high-value deals
The Allsopp & Allsopp data revealed fancy residential projects in high-end locations such as Jumeirah Golf Estates, Mudon, and Dubai South (Dubai World Central) figured high in developer sales in terms of high prices, while most off-plan apartment sales were concentrated in Business Bay, Arjan and Jumeirah Village Circle in August.
In terms of number of transactions, August recorded as many as 6,834 property transactions, while the total number of off-plan homes sold in 2023 year-to-date was at 41,775.
Apartments remained the preferred home choice for both newcomers and long-standing Dubai residents, accounting for 70 percent of the total volume and 50 percent of the overall value of over AED16 billion transactions this year till August.
Villas and townhouses sales accounted for 21 percent in volume terms and 32 percent in value terms, amounting to AED10.5 billion across 2,432 transactions, while the remaining eight percent of the volume and 17 percent of the value were accounted by other property types, amounting to AED5.7 billion during January-August this year.
Flexible payment plans push up off-plan sales
Industry insiders said innovative flexible payment plans offered by developers acted as a big push factor for the surge in off-plan sales this year.
“These innovative solutions make property purchases more accessible – for both international and local investors,” said a senior executive with a Dubai-based real estate investment firm.
Heightened confidence in Dubai’s off-plan projects due to the consistent project delivery in line with the Dubai government’s robust legislations, and the emergence of branded residences adding a touch of luxury and desirability are cited as the other major factors driving developer sales.
Supply yet to catch up with rising demand
Notwithstanding the record off-plan sales in August – and also this year till date, industry experts said Dubai’s property sector still lags behind the rising demand.
Lewis Allsopp, CEO of Allsopp & Allsopp Group said despite the progress in the sector made in recent years by established local players and entry of some of the big global brands, the city’s development pace is yet to match its constant demand.
“The past year alone saw an influx of nearly 100,000 residents. To sustain this growth rate, an additional 33,000 homes would have to be in the books in the last quarter of 2023,” Allsopp said.
He said while Dubai’s commitment to development has been apparent with numerous announcements this year, the typical three-year handover period underscores the urgency to expedite projects, especially in high-demand areas like Business Bay and Jumeirah Village Circle, for example.
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