Data provided by a leading property portal show Dubai’s off-plan market has bounced back to 2019 levels and is continuing to gain momentum, confirming the exploding investor confidence in the new boom cycle.
This market has been thriving since the start of 2021. The market is now seeing developers starting to build new villa and townhouse communities in parts of Dubai like Dubailand and Dubai South, which are selling out quickly. Property Finder says off-plan volume is up by 46 percent and value is up 44 percent when compared to July 2021.
Dubai’s off-plan market saw 2,599 sales transactions in August 2021 worth Dh4.95 billion, the highest value recorded in a month for the off-plan property since December 2013. It is also the highest number of off-plan transactions in a calendar month since November 2019, according to the report.
“During the pandemic last year, the off-plan market significantly declined. The average was about 30 percent of properties sold in the off-plan segment. Today, we have bounced back to 2019 ratios where secondary and off-plan segments are almost 50/50. This is a clear indication that investors are coming back into the market due to their confidence in the future of Dubai,” said Lynnette Sacchetto, director of Research and Data for Property Finder.
In terms of off-plan villa/townhouses transactions, Arabian Ranches-3 (187 units) led the way, followed by Villanova (157), Tilal al Ghaf (79), Dubai South (58), and Mohammed bin Rashid City (16). Dubai Harbour (260 units) had the most off-plan apartment sales followed by Mohammed bin Rashid City (239), Business Bay (219), Jumeirah Village Circle (171), and Jumeirah Lakes Towers (137).
Besides an increase in transactions, Sacchetto said buyers are also more willing to buy high-valued apartments.
A year-on-year increase of 53 percent has been recorded in the average transaction price for an off-plan property from Dh1.246 million in August 2020 to Dh1.905 million in August 2021. “The median price for off-plan apartment sales transactions in August 2020 was Dh745,500. The price has increased year on year by 48 percent to Dh1.1 million. We now see a 12 percent increase in the median price for off-plan villa/townhouses sales transactions as they increased from Dh1.622 million in August 2020 to Dh1.818 million in August 2021,” said Sacchetto.
“With the Expo less than two weeks away, I believe the off-plan market will continue to thrive. Looking at completed supply in 2021 as of September, we had a total of a little over 34,000 units completed. In the apartment sector, over 26,000 units were completed, and for villa/townhouses over 6,000 units. Now the question is, will there be enough stock available to sell in the off-plan market to fulfill investor demand, especially with foreign investors coming in over the next six months for Expo2020,” said Sacchetto.
Dubai Hills Estate, Arabian Ranches, Palm Jumeirah, Damac Hills 2, and Mohammed bin Rashid City ranked top for off-plan demand in August 2021 for villas/townhouses, according to Property Finder data. Apartments are in demand in Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay, and Jumeirah Village Circle.