Dubai’s off-plan sales surge on steep ROI spike

As Dubai’s position as an international business hub grows, more and more new home buyers and investors are becoming aware of the numerous advantages available in the emirate’s real estate market.

Property experts believe that off-plan investment prospects in Dubai are now gaining “generational interest,” with rental yields increasing at their fastest rate since 2014.

The market provides excellent rental returns for investors. According to Chestertons’ Research, average apartment rents in Dubai increased by 4% in the fourth quarter of 2021, following a relatively unchanged third quarter. This is the largest increase since 2014.

Strong returns on investment (ROI) are no longer limited to central locations like Downtown Dubai or Dubai Marina, according to the real estate consultancy, and can now be found in vibrant suburban communities like Sports City, Jumeirah Village Circle, Arjan, Arabian Ranches, and Al Barsha South, to name a few.

Investor's take Advantage...

It stated that “Dubai’s reputation as a worldwide business hub, competitive real estate pricing, good rental returns, and expanded residency choices make it suitable for new house buyers.”

Investors can also take advantage of extremely low off-plan real estate prices in comparison to the rest of the world. For example, the average price per square metre in Dubai is €5,000, compared to upwards of €10,000 in Paris or Sydney.

Furthermore, the local off-plan market is experiencing positive growth: in the fourth quarter of 2021, Dubai’s off-plan apartment sales totaled Dh11.65 billion across 5,303 transactions, up from Dh9.79 billion across 4,905 transactions in the third quarter of the previous year.

Dubai's hike in Real Estate

According to a recent research, Dubai’s real estate continued to rise in February as investors and end-users looked for the finest purchase possibilities for residential properties on long-term lease. Due to demand for residential properties in Dubai, the ValuStrat Price Index (VPI) reached 78.1 points in February, which is 21.9 percent lower than the 100-point index base of January 2014. It also highlighted a 2.1% increase in villa values and a 0.5% increase in apartment prices in the previous month.

According to Property Finder, the market has seen 23,739 sales transactions totaling Dh63.43 billion since the start of Expo 2020 Dubai. There were 13,120 secondary/ready sales at Dh41.19 billion and 10,619 off-plan sales worth Dh22.24 billion in total.

“Dubai’s off-plan investment prospects are increasingly receiving generational attention because to the unique benefits afforded by the local market.” This can range from first-time buyers who realize it’s the best way to get on the property ladder instead of being priced out of markets like London, to buyers who are planning their retirements and want to rent or short-term lease their properties as vacation homes while keeping part-time annual use for winter breaks,” said Dennis Chan, Chestertons’ global head of sales.

Conclusion

Many investors used to look at the region through a short-term lens, but now they are looking at the Dubai market with a long-term perspective, according to real estate specialists. They credit this to a number of factors, including a growing, talented, multi-cultural population that benefits from world-class educational and healthcare facilities, future-oriented neighborhoods, and a booming economy.

Source : Khaleej Times

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