As Dubai’s population experiences swift growth, the demand consistently surpasses the available supply.
Dubai’s off-plan real estate sector has exhibited remarkable growth over the past four years, propelling the overall UAE market to reach Dh455.7 billion in sales in 2023. Experts anticipate that, with demand surpassing supply, the off-plan sector will continue to contribute to the market’s growth in 2024 and beyond.
Despite the completion of over 60,000 units, demand in Dubai continues to outpace supply, driven by the city’s rapidly growing population, which ranks among the fastest globally, according to Madhav Dhar, COO and founding member of Zazen Properties. In 2023, Dubai experienced a significant boost in its real estate market, benefiting from a thriving tourism sector that led to a sales value of Dh160.46 billion, a 72.3% increase from the Dh93 billion recorded in 2022. The off-plan segment, in particular, demonstrated exceptional performance with 68,783 transactions in 2023, marking a 59.4% increase from 2022.
Dhar highlighted the visionary decision of the UAE to eliminate the Dh1 million down payment requirement for the golden visa program, stating that this move would strengthen Dubai’s real estate landscape. He emphasized that the change not only enhances accessibility for investors but also injects fresh vitality into the market, allowing investors to take advantage of Dubai’s world-class infrastructure and global connectivity.
The recent decision by the UAE to waive the Dh1 million down payment requirement for the golden visa program through real estate investment is expected to attract thousands of investors, fostering the nation’s economy and positively impacting the real estate sector. Experts predict that developers will further accelerate their construction pace, building on the unprecedented momentum already observed.
In the third quarter of 2023, off-plan transactions dominated Dubai’s property sales, constituting 65% of the total sales value, which amounted to Dh13.62 billion. Analysts attribute the rebound in Dubai’s off-plan market to strong governmental initiatives, investor interest, and the influence of technologies like virtual reality property tours and blockchain, which enhance transparency and efficiency.
The current trend of rising mortgage rates has altered the feasibility of purchasing ready properties for investment purposes, according to analysts. Despite increased rental yields, the costs associated with servicing a mortgage have surged, diminishing net yields. Consequently, analysts argue that it is an opportune time to invest in off-plan properties due to their distinct advantages, including original pricing and flexible payment plans. They emphasize that Dubai’s population growth remains a crucial catalyst driving demand in this market.
