Tilal Al Ghaf in Dubailand Lagoon
The under-development Tilal Al Ghaf in Dubailand has been one of the more popular buyers' spots for offplan villas. Recent releases have been met with sustained demand. Image Credit: Supplied

Dubai: Offplan sales of villas and townhouses – and not apartments – are what’s in demand right now, and Dubai’s developers are rushing to meet that. More villa launches are set to happen as those at Dubai South, where rates are well below Dh1,000 a square foot, and at Dubailand get picked up by investors who are not waiting around any longer in the hope that the market will soften further.

The top areas for off-plan villa/townhouses deals are Arabian Ranches 3 (with 187 units sold in August), followed by Villanova (157), Majid Al Futtaim’s Tilal al Ghaf (79), Dubai South (58) and Mohammed bin Rashid City (16), according to data from Property Finder.

For offplan apartment sales transactions Dubai Harbour (260 units) had the most sales followed by Mohammed bin Rashid City (239), Business Bay (219), Jumeirah Village Circle(171) and Jumeirah Lakes Towers(137).

Hasty decisions hurt
After the double-digit market drop last year, many offplan buyers from past years had offloaded their properties thinking that prices will cave in further. But now, those locations are seeing significant price recoveries.

"Those who sold out will rue their decisions," said a property analyst. "The speed of Dubai property market's ongoing recovery has surprised all."

New crop of investors

These numbers are a significant improvement over 2020, as a new set of investors come into the offplan space. (In the ready market, it is mostly end-users who are still active.)

“Last year, the (Dubai) offplan market significantly declined,” said Lynette Sacchetto, Director of Research and Data for Property Finder. “The average was about 30 per cemt of properties sold were in the offplan segment.

“Today, we have bounced back to 2019 ratios where secondary and off-plan segments are almost 50:50. This is a clear indication that investors are coming back into the market due to their confidence in the future of Dubai.”

Increase in value too

With villas and townhouses being in such demand, the average value per transaction is also firming up nicely. This is what developers will be watching out for before deciding whether they are ready to do new offplan or not.

Speculation is building up that two of Dubai’s biggest developers will be announcing projects shortly. That all their doubts about whether they are better off holding back for another year or so is without merit.

According to Property Finder data, the average transaction price for an offplan property year-on-year has increased by 53 per cent from Dh1.24 million in August last year to Dh1.90 million now. For an offplan apartment, it has shot up from Dh745,500 year-on-year to Dh1.01 million – and that’s a straight 48 per cent jump.