In Pictures: Property buyers in Dubai are getting back into offplan in a big way

Finding a ready home is getting to be too expensive in Dubai? And sellers not willing to compromise on asking prices. Many investors are finding this may then be a good time to go all offplan.

The first quarter 2022 numbers show that offplan apartment sales have already shot past ready units sales – at 6,991 vs 6,400. On the villa side of sales, ready homes outsell new launches by 2,358 vs. 1,667, according to the portal DXBinteract.com. Even on villas, ready’s advantage needn’t be there for long as developers accelerate the launch pipeline.

And they are doing so by keeping tight control on their launch prices despite the all-round increase in building material costs. The market focus is shifting from pricey homes to the mid-market and below.

It is reflected in the fact that Business Bay was the most popular spot for offplan and ready sales, with a combined 2,100 units sold in the first six months. Business Bay has been a catch-all sort of destination, with end-users/investors scouting for Dhsub-Dh1.5 million units as well as more expensive ones. (More than 300 units are at the under-construction 70-storey Regalia project from Deyaar.)

At Dubai Marina, there are still launches happening, with LIV Developers confirming its second project, the G+44 storey LIV Marina (located next to the Grosvenor House Hotel). Prices for the one-bedroom units are at Dh1.7 million.

The impression has been that Dubai property market’s ongoing golden run, which started in October 2020, is fuelled only by high-value properties. It gets magnified each time a new record deal for a super-luxury penthouse or villa is revealed. But right through this, end-users have been using a mix of savings and mortgages to finance their Dh1 million to Dh3 million homes. Mostly in the ready homes space.

Now, developers are giving a chance for interested buyers to come in for properties valued under Dh2 million. Damac’s new ‘SAFA One’ tower at Safa Park lists the starting price from Dh1.6 million. Around the Dubai Water Canal are a cluster of offplan options that allow investors to go anywhere from Dh1.5 million to as high as they want it to be.

Along with end-users, a new buyer profile is emerging in Dubai’s property market. They are skewing younger, the sort typically looking for smaller residential dwellings for their own requirements. But they need these neighbourhoods or communities to be slightly upscale, and to offer all the amenities they want within walking – or a quick jogging – distance.

Co-working/living spaces could be the next demand driver for the property market if more of these young professionals/gig workers head here. Developers have even come up with the gaming and PlayStation centres as part of the add-ons.

“The VFM (value-for-money) concept is taking root, as more cost-conscious buyers enter and needing to juggle their savings and mortgages to buy a home,” said an estate agent. “Where developers offer something over the VFM model, such as Danube with its Skyz and Pearlz, the demand has been instantaneous. This is where prices around Dh1 million or just over hit the sweet spot.” (Skyz was one of the top selling projects in first quarter.)

Sub-Dh1 million homes too are in demand, with communities such as the Riviera – part of MBR City - offering these price points as well as the backing of highly flexible payment schemes. Having a lagoon stretching through the community is another attraction, plus the prices. Jumeirah Village Circle too is another that is drawing interest from the budget buyer, with developers ready with low upfront payment and a stretched scheme post the handover.)

“Whether it’s a villa or an apartment, there are homes in Dubai – mostly in offplan – that come with a Dh1.5 million or under tag,” said a broker. “Whether for end-use or investment, those price levels are affordable right now.”