Dubai: Right Place & Right Time to Invest in Off-Plan Property

• When it comes to returning on investment (ROI), lifestyle benefits and business opportunities, there’s no time like the present and no place like Dubai to invest in an off-plan property.

• Dubai’s reputation as a global business hub, its competitive real estate prices, strong rental returns, and expanded residency options make it ideal for new home buyers. 

• Chestertons, a leading global real estate services firm, has already seen a 20% increase in overseas enquiries for Dubai in Q4 2021 and Q1 2022. 

With the UAE economy projected to achieve sustained economic growth in 2022, and Dubai continuing to grow its reputation as a hub for international business, more and more new home buyers and investors are switching on to the extensive benefits on offer in the emirate’s real estate market.

WHY NOW?

Chestertons, the world-renowned real estate services firm with a global operation spanning 120 offices in 20 countries, has recorded a 20% increase in enquiries from overseas for Dubai property in Q4 2021 and Q1 2022. This surge in enquiries has come as no surprise to its MENA team, however, as it is indicative of the current state of the market; Dubai’s off-plan property transactions totalled AED 5.24 billion (€1.3 billion*) in January alone. 

Such insights point to a real estate market that is trending in the right direction, with increasing numbers of local and international investors looking at Dubai as an attractive location to invest in off-plan properties with long-term prospects. For first-time and second-home buyers, as well as seasoned investors, Dubai is fast becoming the full package when it comes to ticking three all-important criteria for worthwhile property investment: ROI, business opportunities and lifestyle benefits.

WHY DUBAI?

Dubai’s reputation continues to flourish across the globe, fast rivalling the likes of New York, London and Sydney as a go-to destination for expats seeking lucrative career and investment opportunities. Upon making the move, those expats are able to reap the rewards of a warm climate, an aspirational lifestyle, and long-term career prospects with tax-free salaries, in a well-connected global hub. 

In addition to scoring above average in the Safe Cities Index 2021, the UAE has also established itself as a leader for ease of doing business, ranking 16^th out of 190 countries (World Bank Data) – strengthened even further by the recent alignment of the country’s working week with global standards. 

While many investors previously viewed the region through quite a short-term lens, they are now looking at the Dubai market with a long-term focus. This can be attributed to multiple key factors, including an ever-growing, skilled, multi-cultural population, which is benefiting from world-class educational and healthcare amenities, future-focused communities, and a growing economy. The UAE’s diverse range of residency options, such as golden, freelance and real estate visas, afford the opportunity to live, work, study, and start a business in Dubai, while also attracting more and more of the world’s top talent to the emirate.

WHY OFF-PLAN?

Off-plan properties are fantastic opportunities for new home buyers to invest in the Dubai real estate market while availing a unique set of benefits. These include extended payment plans, which provide more affordability compared to already completed projects, with various property developers offering post-handover payments at 0% interest – ideal for investors.

Investors can also benefit from highly competitive off-plan real estate prices compared to the rest of the world. For example, the price per sq. m. in Dubai averages €5,000* versus upwards of €10,000* per sq. m. in Paris or Sydney^[1]. Moreover, the local off-plan market is going through an encouraging period of growth: Dubai’s off-plan apartment sales totalled AED 11.65 billion (€2.88 billion*) across 5,303 transactions in Q4 2021, up from AED 9.79 billion (€2.42 billion*) across 4,905 transactions in Q3. 

Importantly for investors, the market offers strong rental returns: average apartment rents rose by 4% over Q4 2021, following a broadly stable Q3 – the steepest increase since 2014 – according to Chestertons’ Research. Furthermore, strong ROI is no longer confined to central locations like Downtown Dubai or Dubai Marina and can now be gained in vibrant suburban communities such as Sports City, Jumeirah Village Circle, Arjan, Arabian Ranches, and Al Barsha South, to name a few.

Dennis Chan, Chestertons’ Global Head of Sales, comments, “The unique benefits provided by the local market mean off-plan investment opportunities in Dubai are now attracting generational interest. This can range from first-time buyers who realise it’s the ideal way to get on the property ladder instead of being priced out of markets like London, to buyers who are planning their retirements and looking to rent or short-term lease their properties as holiday homes, while still retaining part-time annual use for winter breaks.” 

LOOKING TO INVEST IN AN OFF-PLAN PROPERTY?

For expert and impartial advice on investing in the Dubai off-plan real estate market, get in touch with Chestertons’ team of specialists HERE.