Golden Visas, luxury homes fire up Dubai offplan property sales, and with more to come
Dubai: The Dubai property market is right in the middle of another offplan sales boom, with buyers signing up for projects where developers are willing to go as low as 5-10 per cent on down payments and with full waiver of registration and other fees.
In some cases, the down payment can be as low as 1 per cent or even a flat Dh50,000, and you are on the way to buying a home. These days, investors are more particular about the size of their upfront payments than about whether they have 3-5 year post-handover payment plans.
There is also the strong pull for the Golden Visa program linked to the minimum Dh2 million in property investments, with market sources saying this to be a key factor in getting first-time investors from overseas acquiring homes in Dubai.
Plus, of course, at the luxury end of the Dubai property market, demand continues to hover at its peak, with buyers turning to new super-premium offplan projects because there just aren’t enough similar ready homes listing any longer.
Offplan rush to continue?
These trends are visible in the just published January to March numbers for Dubai real estate, with nearly 31,000 homes being sold. This is a 50 per cent plus gain on Q1-2022 – and easily the best showing for Dubai residential sales in a decade, according to DXBInteract.com data.
“There are two drivers here – sustained luxury home demand and the Golden Visa program finding new takers,” said Firas Al Msaddi, CEO of fam Properties, which racked up Dh690 million from the sale of seven Bulgrari branded homes in first quarter 2023.
What should sustain this boom is continued interest for GVs from newcomers to Dubai/UAE. The full possibilities for the GV program are yet to be tapped.
– Firas Al Msaddi of fam Properties
It was last year that the property investment limit for 10-year visas was brought down to Dh2 million from Dh10 million. It immediately expanded the likely base of property buyers, more so among those who were planning to shift their place of domicile to the UAE. “The revised GV program was instantly affordable to a swathe of buyers who earlier might have launched a business here but not considered a property purchase immediately,” said the head of a business consultancy.
Developers in Dubai are confident there is still strong legs to this boom, and the first quarter saw some of the heaviest offplan launch activity since 2017-18. Developers point to the confirmed sales backlog of Emaar, Damac and Sobha Realty in Dubai, Aldar in Abu Dhabi, and Arada in Sharjah to say they can’t spend more time thinking of whether the boom will last.
“If we don’t launch now, there will only be more competition from new projects if we do it later,” said the CEO at a mid-sized developer. “The big elephant in the Dubai offplan room is Aldar – with the three mega-communities they have plans for in the coming months.
“Aldar and the soon-to-relaunch projects from Nakheel will instantly escalate the competition for offplan sales.”
300% The growth in demand for properties valued at Dh15 million and more in Dubai during Q1-2023, according to DXBInteract.com
The growth in demand for properties valued at Dh15 million and more in Dubai during Q1-2023, according to DXBInteract.com
In the luxury property space, there are limited incentives for obvious reasons. Sales of $10 million homes finished Q1-2023 on a solid footing, and setting up the possibility that a new record tally will be set by this year-end.
But come down the property price chain, the market is seeing more incentives for buyers. The best one obviously would be bringing down the down payment to even as low as 5 per cent.
“There are offers where the down payment is 1 per cent of the property value, or just a token one of Dh50,000,” said an analyst. “Unlike in the past, the down payment requirements is where buyers are potentially facing issues. Because of higher mortgage rates, inflation expenses, etc..
“So, rather than focus on longer post-handover payment plans, today, developers want to lower the burden on the initial payments. This way they make sure to ease the way for first-time investors/end-users.”
If the sales boom continues through the second quarter – early April numbers from Dubai Land Department remain in bullish range – Dubai’s developers will be justified in doing everything possible to ease the point of entry for buyers. And keep the boom going…