Half of Dubai homes sold so far this year were off-plan

Some 3,000 off-plan properties were sold in January and February, a decline from 2018, says Property Finder

Residential buildings under construction in Dubai South. Pawan Singh / The National

More than half of residential real estate sales in Dubai this year were off-plan rather than completed homes.

A total of 3,069 off-plan homes exchanged hands in the first two months of 2019, representing 55 per cent of all Dubai residential sales in the same period, according to the UAE real estate portal Property Finder.

So-called "secondary market" sales of completed homes accounted for the remaining 45 per cent – a total of 2,463 transactions – with prices typically more attractive and affordable for this type of real estate.

“This is a far cry from the earlier cycles of the Dubai property market [up to five or 10 years ago], when off-plan sales dominated and secondary home transactions trailed by a huge margin,” Property Finder said. “This suggests that Dubai is no longer a purely investor-driven market.”

However, the figures show a 7.8 per cent year-on-year decline in the total volume of off-plan sales compared to the first two months of 2018, according to the research. By comparison, the volume of secondary market transactions in January and February this year fell only by a marginal 1.4 per cent year-on-year.

More robust activity in the secondary market implies that end users are still active and purchasing homes in Dubai, with developers devising appealing, low-cost payment plans to attract buyers and clear remaining stock in their inventories, Property Finder said.

The UAE property market has faced challenges in the past four years since oil prices plummeted for three years from 2014, having a negative impact on real estate values and forcing developers and landlords to be more competitive with their prices.

“In 2018, we saw more of a balance between secondary and off-plan sales transactions and that trend appears to be continuing into 2019,” said Lynnette Abad, director of research and data at Property Finder.

“[This year], sellers have been much more motivated, one reason being the competition they face with off-plan, ready stock.”

For apartment sales, Palm Jumeirah, Dubai Marina and International City accounted for the most secondary market transactions in the first two months of this year, while Dubai Hills Estate, Downtown Dubai and Dubai Creek Harbour accounted for the most off-plan deals, according to Property Finder’s research.

For villas and townhouses, Dubai South, Arabian Ranches 2 and Dubai Hills Estate contributed to the bulk of off-plan transactions, while Arabian Ranches, The Springs and Al Furjan accounted for the most secondary market deals.