Strong demand for off-plan properties in Dubai
Potential buyers shift interest towards more affordable properties
Potential buyers in Dubai are moving towards off-plan properties with attractive payment plans or secondary residential areas that had a lower asking rate, according to a recent report by Asteco.
Key off-plan projects include Mulberry Park Heights at MBR City, Atria in Business Bay, BLVD Crescent and Boulevard Point at Downtown Dubai, Palm Tower Residences on Palm Jumeirah and Celestia Serviced Apartments at Dubai World Central.
Dubai’s residential sales market has slowed down to more moderate growth levels in the first quarter of 2014, following a spike in prices after the Expo 2020 announcement, the report said.
It added that average apartment and villa sales prices stabilised at 3% and 6% growth.
"There were significant increases in unit prices in Q4 2013 following news of Dubai's Expo 2020 win and we saw deals flounder as sellers with genuine offers decided to wait in anticipation of further growth. Transactions slowed down in established communities where surging prices went beyond what buyers were willing to pay," said John Stevens, managing director at Asteco.
"Now we are witnessing growth in secondary residential areas, which are attracting prospective purchasers looking for more sensible asking rates with potentially better growth potential," he added.
The Asteco report also expressed concerns regarding unsustainable pricing in the residential leasing market where apartment and villa rates grew by 5% and 3% in Q1.
"This continued rise in rents could herald the start of a flight to affordability for budget sensitive Dubai residents, who may well consider relocating to Sharjah, Ajman or further afield in the Northern Emirates," Stevens noted.