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Dubai’s off-plan property market continues to pick up, with thousands of new residential units entering the market recently as developers look to cash in on strong market sentiment, according to a new report.
As of March 2022, Dubai saw more than 5,800 flats and villas entering the off-plan market for sale, with anticipated combined gross sales value of 10.4 billion dirhams ($2.8 billion), Property Monitor said in its latest analysis.
“While the resale and completed property market slows down under pressure from a combination of low inventory and a bid-ask spread between buyers and sellers that has stagnated, new off-plan development project launches continue to surge,” noted Zhann Jochinke, Chief Operating Officer of Property Monitor.
After a quiet 2020, developers have resumed project launches, unveiling several off-plan residential developments that range from apartments in high-rises to villas in premium neighbourhoods. Project launches started picking up during the last three months of 2021.
“Strong market sentiment, quick take-up from both investors and end-users due to UAE’s demonstrated positioning as a global investment hub, safe haven and favourable tax, ownership and visa regulations, all factors are collectively underpinning the off-plan market,” said Prathyusha Gurrapu, Head of Research and Advisory at property consultancy Core.
Recovery
Despite the wider backdrop of global tensions and inflationary pressures, Dubai’s property market continues to strengthen. It is now 17 months into the recovery and expansion phases since bottoming out in November 2020, according to Property Monitor.
“Dubai appears to be a likely net beneficiary of the current movements and allocations of capital with its increasing reputation as a safe haven and high-quality residential location, well priced compared to other international benchmarks,” the report noted.
Overall, prices recorded a 0.54 percent increase in March, bringing average property values to 1,007 dirhams per square foot. The pace of price increases seen recently is said to be “much more measured” compared to the previous market cycle, with prices growing at a rate of 0.5 percent to 1.5 percent per month.
In February, apartment prices averaged 1.19 million dirhams, while townhouses and villas cost around 1.7 million dirhams and 4.2 million dirhams, respectively.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
