In 2023, Dubai solidified its status as the ultimate trendsetter in the world of luxury real estate, leaving iconic cities such…
In 2023, Dubai solidified its status as the ultimate trendsetter in the world of luxury real estate, leaving iconic cities such as New York, Paris, and Amsterdam trailing behind. As revealed by the latest findings from Property Finder, a staggering $8 billion in transactions took place, with 60% of eager buyers setting their sights on opulent apartments during October.
Now, as we venture into 2024, the ultra-luxurious real estate domain, marked by individual property transactions soaring to $420 million in the third quarter of 2023 alone, is gracefully undergoing a subtle evolution. However, there is one particular area in real estate that is gradually taking flight: Off-plan property investment. In a profound and in-depth conversation with Louai Abou Khzam, Co Founder and Managing Director of Prosper Real Estate, we uncover what Dubai’s real estate landscape looks like from a broker’s point of view.
What are your thoughts on how the real estate industry will evolve in 2024?
The real estate landscape in Dubai during 2024 is expected to maintain its positive trajectory, building upon the remarkable growth observed in 2023. As per the Dubai Land Department, the sector in 2023 recorded total sales transactions of 77.69% amounting to $414.2 million (AED 1.52 billion).
With this solid foundation, investors can eagerly explore promising prospects within the sector in 2024, considering various ongoing trends and Dubai’s dedication to excellence and innovation, including an emphasis on sustainability, smart homes, and luxury offerings, as well as numerous state-of-the-art developments. High-end real estate investments in the most preferred and coveted locations, like Palm Jumeirah and Downtown Dubai, are also expected to be in high demand this year.
It has been said that a larger number of people will opt to buy properties instead of renting. What are your thoughts on this?
One interesting trend in the dynamic real estate landscape of Dubai is the transition from renting to property ownership, however, regardless of whether a person decides to purchase or rent, it is critical to make well-informed selections based on individual circumstances. The transition from renting to property ownership is triggered by an impressive range of factors, including low-interest rates, stability, and the prospect of long-term financial gains. Making thorough real estate decisions requires taking into account market conditions, assessing one’s own financial preparedness, and exploring different neighbourhoods in the city. This is because aligning one’s lifestyle choices and long-term objectives is important when making investment decisions. Additionally, real estate professionals must tailor their offerings and services to the unique and diverse needs of numerous prospective investors and buyers. Personalised assistance, transparent communication, as well as educational resources and materials can help buyers in their real estate journey, thereby enriching their home-buying experience.
Off-plan purchases quite often present buyers with the unique opportunity to acquire a home at a reasonable price as opposed to completed residential units. This affordability is offered by developers who usually launch their projects at the pre-construction stage, providing early investors with better and more reasonable property prices.
In addition, a wider group of buyers find off-plan investments appealing, owing to the flexibility in payment plans. Developers frequently provide longer payment terms, which help investors better manage their finances. First-time purchasers or those wishing to diversify their investment portfolios without making a significant upfront financial commitment are more drawn to this flexibility offered by off-plan properties.
Buyers today expect property prices to rise as off-plan properties continue to grow in value, offering them an impressive return on investment once construction is completed.
This potential for appreciation is especially relevant in vibrant real estate markets, such as Dubai, where there is a persistent demand for well-located and visually pleasing homes.
How does Prosper assist clients in navigating the complexities of purchasing off-plan properties, including legal and financial considerations?
Our dedicated team at Prosper Real Estate combines their extensive expertise, knowledge, and capabilities to meticulously examine and clarify the legal aspects of off-plan property acquisition. We ensure that our customers are thoroughly aware of their rights and responsibilities by offering in-depth insights into the terms and conditions of purchase agreements. In order to empower clients to make wise and sound real estate decisions, we strive to make the legal complexities more understandable and accessible.
Additionally, we help customers to carefully understand the monetary obligations associated with off-plan investments. This includes a detailed breakdown of the schedule, related fees, and any additional expenses.
We also collaborate closely with clients to align their financial constraints with various financing solutions. Our innovative services include providing clients with guidance on the best payment plans and investment planning as well as assistance throughout the procedures involved in buying and selling real estate. We also help our customers in charting a business strategy to successfully meet client needs, managing all aspects of the property to maximise profits, and identitying the best mortgage products, in addition to offering leasing and mortgage advising.
We serve as a point of contact for clients and developers, promoting open dialogue to manage and address any concerns that may occur throughout the purchasing process, thereby resulting in a rewarding real estate experience.
Are there specific areas or property types that have seen notable growth or decline recently?
The residential property market of Dubai has experienced a significant surge in 2023, driven by a combination of factors. The surge in rental demand can be attributed to the city’s numerous job opportunities and influx of expatriates. According to data from the Dubai Land Department, the occupier market of the Emirate showcased a strong demand, registering a 40.7% growth in recorded rental contracts, reaching a total of 35,822 in the third quarter of 2023. The average price of a residential property in Dubai increased by 19.6% in the year leading up to September
- This expansion was aided by an average price increase of 19.7% and 18.9% for apartments and villas, respectively.
Moreover, Dubai’s strategic efforts to advance its infrastructure, amenities, as well as overall standard of living have positioned the city as one of the top-most destinations for individuals and families to reside and work, further fuelling the demand for residential properties.
Moreover, the thriving tourism industry and the popularity of short-term rentals have also been a major factor in attracting investors capitalising on the demand for vacation homes and rental properties. We also expect a significant trend to emerge this year, which is the rising cost of well-established locations in the city leading buyers to shift to more affordable and emerging locations. This change in the market dynamics implies that demand in premium areas may drop as purchasers look into more affordable alternatives.
Interview By Julianne Tolentino Published in the CW Property Magazine on page 96: https://property.constructionweekonline.com/emagazines/?id=1059