Dubai has always had a strong offplan property market. A city constantly building for the future, it offers great promise to investors and homeowners who want to invest in something long-term.
With prestigious industry names such as Emaar, Meraas and Omniyat, anyone buying offplan can rest assured that they will be delivered a high-quality product that will be well worth the wait. In 2022, the offplan market picked up again - strongly - after suffering a brief slump at the height of the pandemic, comprising around 44 per cent of all transactions and growing by 86 per cent from the previous year. In 2023, we can expect to see the offplan market hit new heights, with launches expected to be the highest valued in Dubai’s history.
This year has already seen some high-profile launches including Lanai Islands in Tilal Al Ghaf, The Residence at Burj Khalifa, Jouri Hills in Jumeirah Golf Estates, and Bluewaters Bay on Bluewaters Island. New launches in District One and Madinat Jumeirah living have also been announced. That’s a diverse selection of projects, each of which will offer a distinct living experience and a different level of investment value.
Luxury launches coming through
Given we are just halfway through the first quarter of the year, there’s quite a lot more we can expect in terms of high-end residential launches. The offplan market hasn’t looked quite this promising since 2019, when it hit a new peak.
At that time, offplan sales were routinely outpacing secondary market sales, accounting for roughly 60 per cent of all recorded transactions in any given month. Dubai Hills Estate and District One, both brand new communities then, were getting ready to hand over their first units, while newer projects such as Port de La Mer, Arabian Ranches III and Emaar Beachfront had just been announced.
By September 2019, sales of offplan properties had already exceeded the entire transaction volume of the previous year. It was forecast there would be fewer launches in 2020 as developers focused on building and selling their stock. Then came the pandemic, throwing the market completely off-balance.
It’s been a slow road to recovery for offplan, which has been lagging behind secondary market sales over the past couple of years. There were a handful of launches in 2021 as Dubai became one of the first cities to find a sense of stability during the pandemic, which helped to build investor confidence.
A slower return into launch mode
However, offplan still had too much uncertainty associated with it in a world that had already become quite unpredictable. Buyers preferred the comfort of ready-to-move-in properties over the potential loss that could be incurred by investing in a new project. Developers, for their part, tried to encourage investment by offering incentives such as longer payment plans.
As Dubai has largely returned to pre-pandemic life over the second-half of 2022, investors once again have the reassurance that they can plan for the long-term. The growth of the secondary market has also helped to push off-plan to the forefront in an interesting twist.
Over the past year, much has been said about the shortage of supply in the face of unprecedented demand. In such a scenario, it just makes sense to invest in offplan – you can wait a couple of years (or less) and get a brand new home rather than waiting for a secondary property to become available.
Some of the most highly anticipated offplan projects in Dubai have already started to hand over or will soon. Emaar Beachfront, which was announced at the start of 2019, is already welcoming its new residents, while Arabian Ranches II, which was announced at around the same time, is gearing up for its first handovers.
The hugely anticipated Atlantis the Royal had the grand opening of its resort, with handover of the residences imminent. Anyone that invested in offplan over the past few years is now seeing that investment pay off amidst a booming market.
It is clearly the right time to be considering an offplan property investment in Dubai and with the level of launches that are planned this year, I believe it is going to be the year of offplan - in a big way.