Off-Plan Property Sales Booming in Dubai

Off-plan property sales are booming in Dubai according to the latest report by property consultants JLL.

The number of off-plan property sales reached 25,600 in 2017, the highest figure since the global financial crisis in 2008.

According to the JLL 2017 Year in Review report, the majority of sales in the residential sector in 2017 have been concentrated in the off-plan sector, where developers have been offering particularly attractive prices and payment plans.

In the property market overall, both sales prices and rents declined in Dubai over the past year, but the rate of decline slowed down over the fourth quarter of the year – an average of 1.6 percent across all real estate segments.

The report said recent activity in the market suggests that confidence has returned to both investors and developers, although the number of new launches are significantly below their peak levels in 2006/2007 and the volume and the value of sales are also below levels recorded during 2013/2014.

One of the major drivers of the more subdued market has been the slowdown in economic growth, which declined from its historic average of 4.1 percent to just 1.7 percent in 2017.

However, oil price rises in recent weeks could yet instil confidence among domestic and overseas property investors in the lead up to Expo 2020 according to a recent PropertyFinder report.

Craig Plumb, head of research at JLL MENA, said: ‘The UAE real estate industry is entering into a transitional phase, with VAT now in effect and key stakeholders seeking to decipher its immediate and longer-term impact. Although VAT does not apply to residential rents and sales of new residential property, other real estate sectors could be negatively impacted by increased costs and cash flow challenges.’

The report found that residential stock in Dubai was estimated at approximately 491,000 units at the end of 2017, with apartments accounting for more than 80 percent of total supply.