UAE off-plan deals for villas, beachfront properties see striking upsurge

ValuStrat, told Zawya that a growth of 94 percent in off-plan transactions in Dubai real estate has been observed over the last 12 months

  
The palm Jumeirah in Dubai with skyline. Image used for illustrative purpose.

The palm Jumeirah in Dubai with skyline. Image used for illustrative purpose.

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Off-plan properties in the UAE are attracting overseas investors and Dubai residents alike, experts say, noting as well that demand for bigger space, townhouses and villas and beachfront properties is on the rise. 

Haider Tuaima, Head of Real Estate Research at ValuStrat, told Zawya that a growth of 94 percent in off-plan transactions in Dubai real estate has been observed over the last 12 months. The divergence is attributed mainly to the COVID-19 lockdown last year.

Off-plan sales also improved quarterly by 56 percent, he added. “Off-plan sales represented 43 percent of overall residential home sales. Around 50 percent of off-plan sales so far this year were focused in these communities: Jumeirah Village (11 percent), Jumeirah Lake Towers (10 percent), Meydan One (9 percent), Dubai Harbour (9 percent), Business Bay (6 percent), and Sobha Hartland (6 percent).”

Citing data from Property Finder, Dean Charter, Sales Director at luxuryproperty.com, said that roughly 35 to 45 percent of transactions each month have been off-plan sales. “The most expensive off-plan sale we’ve had this year has been XXII Carat, selling for Dh 105 million. And there have been a mix of sales at Emaar Beachfront, Dubai Hills Estate and Jumeirah Golf Estates. Market performance overall has been fantastic, and we are looking at even higher numbers in the months to come.”

DEMAND DRIVERS

Nikita Kuznetsov, founder and Partner at Metropolitan Group, told Zawya that the main change seen in the market now is the limited availability of projects from developers, which contrasts with the abundance of projects over the previous four years. “With government restrictions around the launch of new projects, we’ve seen a limited number of projects come to market, which means we now have more demand than supply.”

Metropolitan Group saw the best first half-year on record, with property deals worth Dh 2.2 billion across the UAE, 60 percent of which were off-plan sales. Kuznetsov said, “We registered over 1,000 real-estate transactions, with off-plan sales increasing 200 percent and secondary sales increasing 300 percent compared to H1 2020.”

He added that properties by the sea, townhouses, and villas are in demand the most among buyers. “Seafront properties are very much seen as secondary residences and investments, whereas townhouses and villas are popular with Dubai residents who are looking for a forever home.” He added that 70 percent of the buyers who prefer seafront properties are Europeans and Russian speakers, while South Asians and Arab clients account for 90 percent of those who prefer townhouses and villas.

Nikita Kuznetsov, Founder and Partner at Metropolitan Group. Source: Metropolitan Group

He attributed the rise in off-plan sales to buyers having more trust in developers, as funds are held in escrow by the Dubai Land Department, giving people a sense of security. “It’s easier for buyers to deal with developers than with an unknown seller or real-estate agency in the secondary market. There is also a lack of good units on the secondary market, and people prefer to buy new ones rather than units that are 5 to 10 years old.” 

He added that now is the best time for developers to promote their projects and sell their units, because whatever they put into the market is selling very quickly. “Developers are now offering less post-handover payment plans, fewer promotions compared to previous years, and almost all of them are stopping discounts or waivers. Even the summer, which is a period when buyers are away, has seen strong buyer interest across the board.”

EFFICIENCY IN ONLINE SALES

Kuznetsov said that due to the COVID restrictions across the world in H1, the market had seen many international buyers buying property online from other countries. The UAE has the fastest and most efficient system in the world for purchasing properties online, with some transactions taking less than one hour to be completed.

“Online sales transactions now represent 15 percent of all our sales transactions, compared to only 5 percent pre-COVID-19. Developers are facilitating online transactions by introducing live walking tours, 360-degree property visualisation, online booking forms, e-signature possibilities and minimum payments to secure units.”

Ayman Youssef, Vice President, Coldwell Banker  Source: Coldwell Banker

Ayman Youssef, Vice President, Coldwell Banker, told Zawya that most leading developers, including Nakheel and Dubai Holding, have switched to a pre-registration system instead of the traditional queuing process for launches. “Some developers use an online registration system and others have an appointment-based system where the broker submits the expression of interest (EOI) for their clients, who are then invited during the launch. This is more organized for the clients and the developers, and the inventory distribution is fair.”

(Reporting by Hina Navin; editing by Seban Scaria) 

(seban.scaria@refinitiv.com)

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