In 2022, sales transactions in Dubai’s real estate market increased by 76.5 percent, representing a huge increase. The UAE’s off-plan category was a particularly bright light, contributing to the country’s total real estate growth with a 144 percent performance increase. This optimistic prognosis is projected to continue through 2023 as an additional 115,000 units are being constructed, 34,000 of which have surpassed 70 percent completion and will be delivered by the end of the year.
Despite ongoing turmoil in Europe and a looming global recession, the UAE’s real estate sector has flourished due to changes in consumer behavior; one-third of the country’s population is between the ages of 20 and 30, and 90 percent of this age group prefers to rent properties in the early stages of their careers, but many of these individuals who have been saving up are now willing to invest in affordable off-plan developments.
The 2014 Fifa World Cup in Qatar had a big influence on Dubai’s off-plan expansion. Participants, the majority of whom were high-net-worth people (HNWIs) transiting through Dubai, were exposed to a deeper grasp of what the emirate provides and why it is internationally recognized. With the UAE getting ongoing attention and off-plan developments proving to be long-term and lucrative investments, the rising demand for these unbuilt homes can be linked to a number of market variables, including:
The greatest ROI
Buying off-plan enables investors to obtain a property at the earliest possible moment and for the lowest possible price, while also allowing a number of options for selecting the best units under development. Also, the estimated 10 percent downpayment is a cheap alternative, especially when compared to the customary 20 to 25 percent involved with the purchase of completed projects.
Investors and end-users alike can benefit from the off-plan real estate market’s flexible payment methods, which contribute to the affordability of these properties. Installation programs can be divided into a 40-60 allocation where the purchaser pays 10% of the property’s price at signing, the remaining 30% over the course of 18 months, and 60% at handover. This reduces the investor’s financial burden and enables them to build rental contracts in a way that is profitable for them but also appealing to renters.
High rental returns
The continual migration of ex-pats into the United Arab Emirates allows owners who rent out their units to profit from the completion of a building. Even in emerging neighborhoods of Dubai like Jumeirah Village and Al Furjan, which continue to be among the most appealing alternatives for high-quality cheap housing, landlords may anticipate a minimum yearly net return of 5%.
Security and guidelines
Dubai’s Real Estate Regulatory Authority (RERA) has enacted a set of laws to safeguard purchasers against project delays and cancellations. A 2017 law protects buyers of pre-construction real estate from developers who do not fulfill their contractual duties. As a result, investors may purchase off-the-plan buildings with the assurance that their best interests are always protected, as payments are only paid in controlled accounts, which developers can only access if they reach construction milestones.
Calmness of mind
If an off-plan house is purchased with the intention of living there, the buyer may be confident that they will be the first to enjoy their investment. As with the complex as a whole, their unit will be handed to them brand new with a one-year Defects Liability Term, guaranteeing that the developer is responsible for rectifying any flaws that arise. In addition, developers and contractors have a 10-year commitment to maintain the development’s framework.
Moreover, many contemporary complexes have enhanced architecture, technology, and facilities. In Al Furjan, for instance, the first LEED Gold certified and Well-Being integrated development is currently under construction; upon completion, ZaZEN Gardens will help residents live better through modern sustainable design, high-quality finishes, easy connectivity, and a multitude of community-focused amenities, aligning with Dubai’s 2040 Urban Master Plan and UAE’s 2050 Net Zero commitment.