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Dubai sees strong demand for off-plan properties priced below Dh1m

Transaction levels for the segment stand at 46% even as investor interest tilts towards Dh2m and over in the ready homes segment

Gulf News

Dubai: Investors are snapping up off-plan properties with a prices below the Dh2 million mark, while for ready homes the interest is veering more towards those from Dh2 million and over.

In fact, since 2015, the transaction levels for properties under Dh1 million are at 46 per cent, according to data from consultancy Reidin-GCP.

Properties between Dh1 million to Dh2 million make up 30 per cent while properties which cost Dh2 million and more account for 24 per cent.

Among the new locations or projects with properties below Dh2 million are Damac’s Akoya (in Dubailand) and those at the IMPZ, apart from long-standing favourites such as International City and Discovery Gardens, according to the Reidin-GCP report.

The Akoya master-development offers a broad mix of pricing options, from Trump- and Bugatti-branded homes to those that would be more suited for a mid-market or a ‘millennial buyer’. The first properties are due for delivery shortly.

Even in luxury-head locations such as the Palm, off-plan options beneath the Dh2 million mark are available from the likes of Azizi Developments, coming under the “affordable luxury” tag.

“In the ready space, the major developers account for 43 per cent of transactions, whereas in off-plan they account for 35 per cent,” the report stated.

“The reduced weightage in the off-plan space indicates a broadening of the market as more developers have entered the market offering different price points that increasingly cater to the mid-market space.”

While the activity in the sub-Dh2 million category suggests more end users are making the transition from renting, it could also be that investors are also getting on board expecting to see clear value gains once the realty market picks up ample steam. The buying mix is stark in the level of support garnered by the recent launches at Dubai South, in particular.

“For Emaar and Dubai Properties’ [built] units, the majority of transactions is above the Dh2 million level,” the Reidin-GCP report adds. “We expect this to gravitate lower with the introduction of lower price point items from the respected developers. “Given the shift towards lower ticket items, developers have steadily changed their product mix to incorporate this dynamic. As the product mix continues to proliferate, the pattern of transactions will more closely resemble developed markets. It is likely that the supply pipeline [historically concentrated towards the upper end of the market spectrum] will graduate towards the mid-end of the market, thereby achieving a balanced market dynamic.”

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