Dubai's real estate market is experiencing a notable surge in off-plan property sales, with many owners now choosing to sell their properties just a year before they’re completed. This shift is fueled by the substantial returns off-plan properties can provide, especially when they're close to handover.
In Dubai, off-plan properties, those purchased before construction finishes, are increasingly seen as a lucrative investment. Traditionally, many buyers invested in these properties with a long-term view, intending to live in them after completion. However, thanks to Dubai’s rising market, selling these units closer to handover now offers impressive returns, drawing in both new investors and end-users who might otherwise have stayed in the units.
According to industry reports, off-plan sales now account for over half of Dubai’s real estate market transactions. Data from the first nine months of 2024 shows more than 125,000 residential property deals, a 36% increase from the same period in 2023, driven largely by a surge in off-plan sales. Off-plan transactions are up more than 50% this year alone, with no slowdown in sight as developers continue launching new projects.
Zhann Jochinke, COO of Property Monitor, highlights an emerging trend: more sellers are reselling their off-plan properties as they near the final 12 months before handover. Interestingly, many of these sellers initially planned to live in these properties. However, the promising returns from selling have made them reconsider, adding more listings to the market. With buyers eager to purchase properties close to completion, this trend has intensified as demand for nearly finished properties grows.
Another key driver is the shortage of move-in-ready properties in Dubai. Lewis Allsopp, Chairman of Allsopp & Allsopp, notes that this shortage is causing developers to launch more off-plan units to meet demand. In the third quarter of 2024 alone, developers released over 22,500 new off-plan units. Off-plan sales now represent a dominant 56.5% of Dubai’s real estate activity, spurred on by high demand and the limited availability of completed homes.
For many investors, off-plan properties are particularly attractive not only due to their typically lower prices but also because developers offer flexible payment plans for these projects, making it easier to invest. Such incentives are rare for completed properties, which often require full upfront payment or financing options. As a result, the value of off-plan units tends to increase steadily during construction, making them ideal for profitable resales close to handover.
Off-plan properties reach their peak value at completion for several reasons. First, they offer immediate move-in options, eliminating uncertainty over construction delays or quality issues. Second, they’re often in high demand as newly completed properties in a growing market like Dubai. Coupled with the current supply shortage, these new, ready-to-move homes become highly desirable, often commanding a premium price.
Allsopp adds that properties sold within a year of completion typically sell for a higher price due to their “new” status, increased value during construction, and ready occupancy, factors that appeal to buyers seeking a hassle-free buying experience.
One of the unique aspects of Dubai’s off-plan market is the flexible payment plans developers offer, allowing investors to buy in at lower upfront costs compared to ready properties. Throughout the construction phase, property values generally appreciate, creating a window for investors to sell closer to completion and capitalize on these gains. This, paired with Dubai’s current market conditions, has led to a rise in off-plan resales, where investors can see significant profits by selling just as properties approach completion.
Dubai’s off-plan property market offers a prime opportunity for investors, especially with the trend of reselling properties close to completion. This strategy allows investors to maximize returns by leveraging rising property values and flexible payment plans, all while meeting the high demand for ready-to-move homes.
With continued growth and a shortage of completed properties, Dubai’s off-plan market stands out as a promising investment. For investors seeking high returns, it’s a dynamic market that shows no signs of slowing down.
