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Why Invest in Dubai Off-plan Properties in 2024

Off Plan Properties

Table of Contents

Introduction

Entering the grand year 2024, off plan property sales are booming in the Dubai real estate market. So, which among them might be the best areas to invest in? In this blog we’ll take a look into the most promising yet rewarding market for homeowners and investors in Dubai. Dubai’s real estate sector witnessed the majority of sales coming from the off-plan market in the month of January, 2024. As per some of the recent reports, the residential off-plan sales accounted for 58.3% of the total sales volume, while transferred title deeds comprised 41.7%. It also noted that sales price for Palm Jumeirah villas experienced a 2.85% increase, while JVC apartment prices rose by 4%.
Off Plan Properties

Dubai off plan property sales

Various areas across the city have attracted the attention of both investors and end- users, primarily due to Dubai’s quality of life, stringent safety standards, and employment opportunities. With the real estate market in Dubai reaching an all-time record of $9.6bn which is equivalent to 35.4 billion in January 2024 and there has been remarkable sales growth. This increase is predominantly driven by a high demand in prime investment zones such as Downtown, District 1 MBR, and Dubai Creek Harbour.

Highlighting Dubai’s attraction as a magnet for wealth migration, the UAE has already secured the second position globally by exceeding even the position of the United States. This strengthens the city’s reputation as the most preferred destination for investors who are seeking for profitable opportunities. Properties purchased during the period of pandemic have experienced a significant increase in value that is ranging from an estimate of 50% to as high as 200% in certain areas by indicating high returns for investors who bought properties during that time.

Off Plan Projects with price appreciation in 2023

Ten areas, as per Property Finder, contributed to almost 65.3% of the total sales value and 53 per cent of the total number of transactions in the off-plan market. These included perennial favorites Business Bay, Dubai Harbour, Dubai Creek Harbour, Jumeirah Lakes Towers, and Jumeirah Village Circle, as well as newcomers Sobha Hartland, Al Yufrah 1, Arjan, Jumeirah Village Triangle, and Madinat Al Mataar. While the top five off-plan transacted areas were Dubailand, Mohammed bin Rashid City, JVC, Business Bay and Dubai Marina.

Key off plan investment areas in Dubai:

  • Downtown Dubai: Offering luxury residential and commercial properties, starting from AED 2,056 ($560) per square foot, epitomizing cosmopolitan living.
  • District1 MBR: An exclusive residential district with upscale amenities, starting from AED 1,724 ($469) per square foot which is highly appealing to high-net-worth individuals seeking sophistication and privacy.
  • Dubai Creek Harbour: A visionary waterfront community which is one of the Emaar off plan projects. Located along the Creek, this off-plan project features a mix of residential towers, commercial spaces, and iconic landmarks like the Creek Tower. Prices start from AED 2,056 ($560) per square foot
  • Dubai Hills Estate: A master-planned community that is renowned as the green heart of Dubai offering world-class amenities starting from AED 1,962 ($534) per square foot.
  • Palm Jumeirah: Known for ultra-luxury waterfront properties and unparalleled views are starting from a price range of AED 6,092 ($1,659) per square foot.
  • Bluewaters Island: It is a vibrant mixed-use development with a short distance to Jumeirah Beach Residence.The record-breaking Ain Dubai observation wheel is the centerpiece of the lifestyle destination, which has luxurious waterfront residences, entertainment, retail and dining concepts. In Bluewaters Island the property prices are starting from AED 4,805 ($1,308) per square foot.

Furthermore, the demand for off-plan properties is also rising tremendously. An impressive 48% year-on-year increase in 2023 is evidently indicating the investor confidence in the city’s real estate market and its long-term growth potential.

Looking ahead to 2024, prime investment opportunities abound in areas such as Jumeirah Village Circle, Maritime City, and Downtown for apartments, while communities like The Valley, Dubai South, and California Village stand out for villas and townhouses.

Why Off-Plan Properties in Dubai?

Investors can secure properties at a more affordable price by opting for off-plan purchases as compared to ready-to-move-in units. Furthermore, off-plan properties often come with adaptable payment options by simplifying the buying process for the investors. Considering a post-handover payment plan is a great way for customers to minimize the risk of delays, as the responsibility to complete the project on time rests with the developer, who receives a major chunk of money during the time of post-handover. However, each project differs, and understanding the payment schedule, associated fees, and financing options available is crucial.

Reason to Invest in Dxb Off-Plan Properties

In this current market, it is a great time to invest in Dxb off-plan properties for several reasons.

  • Firstly, the current landscape of rising mortgage rates has altered the viability of purchasing ready properties for investment purposes. Despite increased rental yields, the costs associated with servicing a mortgage have increased by resulting in diminished net yields after factoring in all expenses. Consequently, the economics of investing in ready properties for returns have become less favorable.
  • Secondly, off plan investments offer a distinct advantage by enabling investors to allocate funds towards properties still available at their original prices. The flexibility of payment plans mitigates the impact of high lending rates, ensuring greater adaptability in managing finances.

Lastly, Dubai’s population growth serves as a crucial catalyst driving the demand for residential properties. The UAE government has implemented various initiatives as part of promoting the population growth in Dubai by attracting a steady flooding of individuals to the city. Remarkably the properties in Dubai are experiencing record high occupancy rates that have been reaching 95% for freehold properties and 97% for leasehold properties simultaneously. This trend indicates a sustained demand for rental properties.

When buying off plan

  • Choose reputable developer
  • Evaluate location
  • Understand the payment plan
  • Calculate associated costs
  • Review Legal/ Contractual safeguard
  • Conduct your own thorough research
  • Check prices on online platforms before making decision
  • Seek guidance from reputed or trusted consultant

FAQs

Is buying off plan property in Dubai safe?

Yes, when you buy off-plan property in Dubai, there is the potential for capital appreciation. Buying a property at its development stage can secure you the property at the current market price. However, as construction progresses and the property nears completion, its value is likely to increase.

What are the benefits of off-plan in Dubai?
  • Lower Purchase Costs
  • Flexible Payment Plans
  • Lower Mortgage Rates
  • Capital Appreciation
  • High Rental Yields
  • Buyer Protection
  • Wider Selection
Will Off-Plan Properties increase their price value?

Off-plan properties provide lower prices and more financial flexibility, which benefits both seasoned investors and first-time buyers. With multiple projects released each month, developers compete primarily on price and advantageous payment arrangements. Some projects’ values increase to far over 40% by handover, offering off-plan purchasers a sizable advantage. These price calculations may vary based on the developers.

Is it easy to get a mortgage for Off-Plan Properties in Dubai?

Yes, Getting a mortgage for Off-Plan Properties in Dubai is likely simple. Like with any mortgage, there are qualifying conditions that need to be met, however comparatively these are straightforward and based on what would be required exactly for a ready property.

Is it possible to sell an off-plan property before completion?

Yes – you most certainly can. But generally, buyers can only sell off plan property by paying 30 to 40% of the total amount. This ratio may vary depending on the type of project and developers.

What’s the difference between off plan and secondary market?

Off-plan properties can offer lower prices, potential capital growth, and an easy payment plan. But you will have to wait until the construction reaches its completion. Talking about Secondary properties, it can be more expensive, but you can rent out your property as immediately as possible to generate a return.

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