Dubai Real Estate picked up well this year, with a boost in delivery of offplan projects with over 79 projects handed over comprising almost 12,000 homes being delivered to the buyers throughout the year, which is a significant increase from last year’s 9,500 homes delivery in offplans. Particularly, within the offplan domain in Dubai, the most popular element of the year was the introduction of post hand over payment plan, which boosted interest of investors and especially end-users, allowing them higher returns on investments as they would start reaping returns before having to pay 100% on their purchases, and would allow end-users to source personal loan initially, and pay off the personal loan to settle the pre-handover installments and obtain a mortgage for up to 75% upon handover from any local bank.
Looking at the Q1 2017 transactions, only within off plan developments, there has been a substantial increase of 45% in volume, which goes to show the increasing demand offplan and how much payment plan based purchases are welcomed by the market in the current situation. A 25% increase in sales volume of secondary market is again a positive sign for the market during Q1, 2017 which collectively ended up at AED 12.28 billion worth of transactional amount. The end-users who opted for mortgage were more prominent in the market in terms of secondary market, however the flexibility in the payment plans has also allowed mid-level salaried people to have a taste of investment through easy installments of 1% monthly payments.
More interestingly, the reason why offplan during the Q1 2017 has performed exceptionally well with total transactions of 3,828 amounting a total of almost AED 5.52 Billion, is the fact that developers have come up with exciting offers like DLD fee discounts, free furnishing options, and even upgrades which attracted a major portion of people who were waiting for the right time to buy. The market has also witnessed an increasing interest of overseas investors which projects a higher potential and trust level in the industry. In order to achieve this, there are many developers and brokerages who have ventured out of the region to conduct road shows, exhibitions and digital campaigns to introduce Dubai and Dubai Real Estate to potential investors, which has started to generate results already, and would continue to reap more in future.
Dubai, for many years was positioned primarily as luxury real estate had also introduced affordable housing this year, which offered units for as low as AED 280,000; this allowed the market to cater a huge segment of small ticket size investors. And to add the value, flexible mortgage plans from the local banks allowed end-users to think more about buying a property rather than renting it.
Another emerging trend that has been witnessed is in buying freehold plots and developing custom built villas. Dubai land department has been proactive in setting up the procedure through which individual owners can get their exterior design and specification approved in some of the freehold regions of Dubai, which allows them to build their villas according to their specification. This not only provides great flexibility for the architects and owners to play around with their ideas and be more creative, but also gives an emotional attachment to the owners, who would love to live in a home, in which they have been involved from scratch.
Overall, the year 2017 has started very well for Dubai Real Estate, as the industry has broaden its horizon by targeting affordable and luxury investors equally, providing end-users as well as luxury property investors ample amount of options to opt for. Real Estate in any region is a connected industry, and particularly for Dubai, where tourism contributes to a major part of GDP, the hospitality industry and real estate go hand in hand. Through the increasing trends in tourism, hospitality and service sector, Dubai has a greater potential to perform better this year and in coming years, and if the pricing and quality of the real estate projects is sustained in long term, along with its timely delivery of the projects, this Emirate is sure to outperform any city of the world at any given point of time.
By Mohsin Ayub – Media Strategist, SPF Realty
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