Decrease in off plan sale brings secondary market into the limelight: CBRE
Staff Report
Dubai, UAE
While Dubai’s vigorous real estate market shows no signs of slowing down, a notable shortage of off-plan property supply has pushed many investors to compete for the best deals left in the market. International buyers looking to settle in Dubai in the next five years will face strong competition to secure off-plan homes. The shortage of supply, however, has shifted the market attention to ready-made units, says the latest report by CB Richard Ellis, a global real estate advisory.
In the year to date to October 2023, as many as 93,590 residential transactions were recorded which surpassed the highest yearly record of 92,178 in 2022. In October 2023, 6,407 transactions were recorded, falling by 23.6 percent from the previous year. Based on CBRE’s latest residential report, off-plan transactions declined steeply both on a yearly and monthly basis.
Taimur Khan, Head of Research – MENA at CBRE in Dubai said, “Whilst the total transaction volumes have decreased in October 2023 by 23.6 percent compared to last year, this does not mean that demand has weakened. Given high levels of demand for off-plan properties and deteriorating levels of supply, off-plan sales have fallen by 57.2 percent in the year to October 2023.” Off-plan transactions dropped to 34 percent from September 2023. (Source)
The lack of off-plan options will create momentum for the sale of ready units. The secondary market has already witnessed a growth in transactions by 29.5 percent from 2022. This potential has been discovered by developers in the UAE to foray into the ready-to-move-in segment of real estate. Danube Properties and the newly established Dugasta Properties have launched Eleganz and Al Haseen Residences for immediate buyers seeking ready-to-deliver homes. Eleganz buyers can start generating a guaranteed 6 percent ROI from the fully furnished properties, while Al Haseen offers a guaranteed 8 percent return per annum for five years, creating attractive investment options.
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