Off-plan sales played a large role in pushing Dubai’s overall property transactions to a whopping Dh258 billion in 2017, a 10 per cent increase from the previous year. But as we approach the middle of 2018, amidst the launch of several new off-plan projects in the first quarter, the market is starting to change.
Dubai has always been a land of promise and its promises, whether it is to build a man-made island in the shape of a palm tree, or the world’s tallest building, generally become reality. In the real estate sector that promise has been of new master planned communities, expanding Dubai’s footprint across the desert and bringing to light new, contemporary luxury homes.
In recent years the lure of that future promise has led to billions of dirhams worth of investment in the off-plan market as investors and end users alike turned away from ready property and focused on these new off plan communities that form part of what I like to call Dubai 2.0
The master development of Mohammad Bin Rashid Al Maktoum City is just one of several such projects in progress, and perhaps the most keenly anticipated. Spread over more than 50 million square feet right in the middle of Dubai, it is being billed as a “city within a city” and looks to be living up to the title. The first phase of the project consists of high-end communities such as District One, Dubai Hills and Sobha Hartland. Having watched these communities rise from the desert, it is very exciting to see the handovers underway. Not just from a property perspective, but in terms of the city’s present and its future. To go back to that term, Dubai 2.0 has arrived.
Off-plan has been dominating the real estate market in Dubai for a while, in large part due to the lack of existing stock that had sufficient quality and substance to it. Home buyers and investors preferred to wait a few years for the new projects to deliver rather than choosing from the ready options available. Now, that trend will start to shift and in fact, it already has. District One, for example, has some of the best-looking mansions in the city with sprawling interior spaces and lush exteriors. Sobha has the distinction of being located very close to the Dubai Canal, with contemporary and well-priced homes. Anyone looking to purchase property in Dubai would be more inclined to pick up one of these homes on the secondary market than to wait another three or four years for the next big project to be ready.
And that’s just the villas. When it comes to apartments, there are many stunning developments on Palm Jumeirah that are either in the process of handing over or ready for handover very soon. The Alef Residences and One Palm are of course well-known and have been in high demand with the most expensive penthouse selling last year for record prices. Palme Couture is another exclusive apartment project with only 14 residential units and a unique sense of design.
If we’re looking more on the community side, there are the apartment projects in Al Barari – Seventh Heaven and Ashjar. Plus, there are prime projects in Downtown and Business Bay that will be ready by the end of the year. Comparing any of these to the freehold properties available on the market previously, one might reasonably say that only Emirates Hills and Palm Jumeirah generated any real interest for the high-end buyer. And even amidst all of the new developments coming up, we are still seeing plenty of interest in that area, and all of the neighbouring Emirates Living residential properties.
Off-plan will never completely lose its lustre. There will always be a segment of buyers who will bide their time for what’s coming next, and with Dubai taking such a long-term approach to community planning, there is always something intriguing on the horizon. However, as Dubai’s market continues to mature, the playing field in the tug-of-war between the off-plan and ready properties has been levelled considerably.
Andrew Cummings is the managing director of Luxury Property, a luxury brokerage in Dubai. The views here are his own.