Most off- plan inventories are now focused on the affordable and low to mid-market options, finds report.
Off-plan real estate sales in Dubai’s residential property market dropped by 30 per cent year-on-year in 2018, according to a new report by consultancy Core.
The report stated that while off-plan transactions increased significantly between 2016 and 2017 – reflecting a large number of developments that were launched and absorbed over the years – there was a reduction in off-plan transactions activity last year, even as the overall market slump continued.
While there are “lucrative deals” to be had in the off-plan market, the slowdown in sales shows a higher preference for buyers opting for ready units or units reaching completion, as buyers prefer immediate occupation, Core said.
“This slowdown in off-plan transactions reflects two trends, the first being that there were fewer off-plan launches in 2018 compared to previous years – albeit, due to market strengthening regulations,” said Edward Macura, partner at Core.
“Secondly, developers prefer to sell inventories closer to the actual date of delivery to gain higher traction from both investors and end-users alike. This trend is re-affirmed with transaction volumes in the ready sales market (both for cash and mortgage transactions) witnessing a steady increase over the last three years.”
“Interestingly, despite overall softening sales prices, the average unit price in the secondary sales market has also shown relative resilience. On the other hand, the average unit price in the off-plan market continues to contract, reflective of both lower price per sq. ft and smaller unit sizes resulting in lower ticket prices.”
Most off- plan inventories are now focused on the affordable and low to mid-market options, the report stated.
Overall, the report found that 21,700 residential units were delivered in 2018, the highest number of deliveries since 2011. Approximately 83 per cent of them were apartments, while 17 per cent were villas.
Dubailand witnessed the highest number of deliveries with over 25 per cent of the total stock, followed by Jumeirah Village Circle and Triangle (13 per cent.
Prominent handovers included multiple project deliveries in Damac Hills Master Development, Hayat Townhouses, Bluewaters Residences and Oia Residences in Motor City.
