Why is it profitable to buy ready-made property in Dubai?
In 2022, Dubai’s real estate market witnessed record-breaking growth, with the number of transactions having reached a 10-year high of 97,252, according to the Dubai Land Department (DLD). This is a whopping surge of 59.5% compared to 2021. As a result, the number of off-plan real estate purchases doubled from 26,059 to 52,075. However, demand for completed residential and commercial units has remained strong, with the number of corresponding transactions having increased by almost 30% over the years — from 31,790 in 2021 to 41,278 in 2022. Such a strong demand among property buyers clearly illustrates a high investment potential of Dubai’s ready property, the value of which will just keep increasing.
Ready-Made Properties and Off-Plan Projects: Market Trends in 2022-2023
Over the past 3 years, prices of ready-to-use properties, namely apartments, villas and commercial units, have been steadily increasing. Thus, in 2020, the average price per sq. ft. in these types of properties was AED 736 (USD 200), whilst in 2021, this increased by 18.3% to AED 870 (USD 237), and in 2022 — by 15.7%, reaching AED 1,007 (USD 274).
The price dynamics for various types of completed properties in 2020-2022 are as follows:
In 2022, price growth was seen in the commercial real estate sector:
In 2022, apartments were in their highest demand in the completed property sector, with a total of 30,565 transactions concluded, which was an increase of 49.5% compared to 2021. Demand for commercial units rose by 21.7% with 2,770 sales transactions.
The most popular area for buying completed property (apartments, villas and commercial units) in 2022 was Dubai Marina, and overall, the top 5 areas with the most ready-made property transactions are as follows:
In 2023, the overall growth trend of the emirate’s property market has continued, with 9,473 transactions completed in January 2023, which is an increase of around 70% compared to the same month in 2022. At the same time, the number of property purchases under construction grew by 68.4% (from 3,344 to 5,632) and completed properties rose by 73.2% (from 2,218 to 3,841).
NBD! Foreign buyers and investors can only purchase freehold properties in the UAE. The list of freehold areas in Dubai can be found in this article.
Ready-Made and Off-Plan Properties: Main Advantages and Disadvantages for Buyers and Investors
Property in Dubai attracts buyers and investors from all over the world due to the high quality of living in the emirate, which is recognised as one of the world’s top 5 cities, as well as lower real estate costs compared to Europe and other popular destinations across the globe, and the city also has one of the world’s highest rental ROI’s.
The key question facing potential home buyers in Dubai is whether to acquire a completed or an off-plan unit. Both are excellent investment options, however you should take into account your budget, purchase goals and an efficient investment strategy. In general, a completed property is costlier, but provides greater stability and comes with less risk. You can start using it immediately rather than waiting several years for the completion.
An off-plan property could be a better option if you don’t have to move in immediately and are willing to wait several years before making a profit on the resale and rental. The main risks in purchasing off-plan properties are that you are purchasing a property that does not yet exist and is only shown in advertisements.
NBD! Due to measures taken by the Real Estate Regulatory Agency (RERA) and the Dubai Land Department (DLD), the likelihood of construction being cancelled or frozen has been minimised. However, the risk of a delayed construction still remains and that the final result may not correspond to the design presented in the original marketing materials.
Advantages of Off-Plan Properties
- The value of properties in the initial stages of construction is usually lower than that of completed properties, however this will grow as the development is completed. Once the project is completed, or at a later date of construction, you can resell the property at a higher price and make a substantial profit.
- More choices. At the project launch stage you can choose the option with the most privileged location in the complex, with the most attractive view, the best area and the most comfortable layout for you.
- Advantageous payment plans and incentives from the developer. Most developers offer flexible payment plans to prospective buyers in interest-free installments with a down payment usually not exceeding 5–20%. You will also be provided with additional benefits, such as partial or full exemption from DLD fees, free maintenance for several years, and many other perks.
Disadvantages of Off-Plan Properties
- Risk of failing to meet construction deadlines originally stated by the builder.
- Not being able to verify the quality of the final product and its compliance with all parameters shown in the brochure, 3D video and other promotional materials.
- Risk of changes in market conditions and the price of the property in the long term.
- You will only be able to obtain a long-term residency visa in the UAE once the project is completed.
- If you are planning to move to Dubai soon, you will have to incur substantial rental costs in addition to regular off-plan property payments.
NBD! For a list of tenant expenses in Dubai, click here.
Pros of Completed Properties
- The opportunity to view the property as it is before making an informed decision to purchase.
- Exact understanding of additional costs, including maintenance fees.
- Location in developed areas. Generally, ready to move-in projects are located in areas with established infrastructure, such as public transportation, shopping, recreational areas, educational and medical facilities nearby.
- Long-term residency visa for UAE residents immediately after purchase. Foreign owners of completed homes priced from AED 750,000 (USD 204,000) are entitled to a 2-year renewable residency visa, and with a minimum investment of AED 2,000,000 (USD 545,000) you can obtain a 10-year Golden Visa, which covers immediate family and household members. Therefore starught after the purchase of ready-made property you will be able to move to the UAE as a family.
- Ability to start generating a stable rental income as soon as possible after the deal is signed. It is recommended to use professional property management services in order to set an optimal rental cost and find a reliable tenant as quickly as possible.
- Possibility to resell the property at any time.
- When buying a completed property from some developers, payment plans are also still available. For example, this option is offered for a number of projects by DAMAC Properties.
Cons of Completed Properties
Higher purchase price compared to properties under construction.
Fewer completed property options in the desired development or community compared to off-plan projects.
NBD! If you do not have all the money you require to acquire a property you like, you have the right to take out a mortgage from a local bank. You can start renting out the property immediately after the deal is signed and cover all or part of the mortgage payments with rental payments.
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Top 5 Ready-to-Move-In Projects in Dubai
Azizi Riviera is a large-scale mixed-use community in a Mediterranean style by Azizi Developments, located in Meydan One. The project comprises 70 medium-sized residential buildings with glass and wood façades, as well as 2 hotels. Although the community is still under construction, select units have already been completed and are ready for occupancy. There are studios, 1–3 bedroom apartments and penthouses with rooftop terraces for sale. Each building has retail outlets, a swimming pool, a gym and landscaped gardens for residents to enjoy. Highlights of the community include a crystal lagoon and a 6,562 ft long beach, a palm-fringed boulevard and numerous communal parks, as well as a wide selection of cafes and restaurants. Once completed, the project will accommodate around 20,000 people.
The current (February 2023) minimum asking price for a ready-to-move-in 1-bedroom apartment in Azizi Riviera is AED 600,000 (USD 163,400), whilst the starting price for a 1-year lease for a similar property in this project is AED 55,000 (USD 15,000). The ROI in this area is over 9%, which is very high for the emirate.
Apartments are available for purchase at Azizi Riviera in Meydan One. Developer Azizi offers units for sale at favourable prices.
Sobha Creek Vistas
Sobha Creek Vistas is an apartment complex by Sobha Realty that was completed in 2022, and is situated next to the Dubai Water Canal in Sobha Hartland, MBR City. The project consists of two 28-storey towers housing 1-2 bedroom apartments ranging in size from 495 sq. ft to 904 sq. ft. Boasting scenic views of the promenade, the canal and the Ras Al Khor Wildlife Sanctuary, the residences are partly furnished, fitted with built-in wardrobes and come with fully equipped kitchens. The complex provides 24-hour security and a concierge service, as well as a swimming pool, a gym, a barbecue area and a children’s playground. Two prestigious international schools, North London Collegiate School, Dubai and Hartland International School, are within a 5-minute walk of the complex, which makes Sobha Creek Vistas ideal for families with children.
Residents can reach Downtown Dubai and Dubai International Airport (DXB) within a radius of a 15-minute drive from the development.
The cost for apartments in Sobha Creek Vistas starts from AED 800,000 (USD 218,000) as of the first quarter of 2023.
Sobha Creek Vistas
Apartments are available at Sobha Creek Vistas in Sobha Hartland, Mohammed Bin Rashid City. Developer Sobha Realty offers units for sale at favourable prices.
The Palm Tower
The Palm Tower is a luxury 52-storey skyscraper by Nakheel, which was completed in the fourth quarter of 2021. Located on the ‘trunk’ of the iconic palm-shaped Palm Jumeirah, the tower includes a 5-star St. Regis Dubai hotel and premium private residences that include studios and apartments with 1–3 bedrooms. Properties range in size from 883 sq. ft to 2,583 sq. ft. All apartments come with branded furniture and appliances.
Residents have access to all the hotel amenities, including a spa and a beauty salon, swimming pools, tennis courts, barbecue areas and children’s play areas. Also in the tower is a restaurant with breathtaking views and one of the most popular attractions within the emirate — an observation deck called The View at The Palm, which opens out onto the unique panorama of the Arabian Gulf, islands and the skyline of Dubai from a height of 787 ft.
The starting price for 1-bedroom apartments in The Palm Tower, as of Q1 2023, is AED 1,950,000 (USD 531,000).
The Palm Tower
Studios and apartments for sale in The Palm Tower complex in Palm Jumeirah, Dubai. Developer Nakheel Properties offers comfortable properties at bargain prices.
Bluewaters Residences is a gated community by Meraas located on the secluded man-made Bluewaters Island, near Dubai Marina. Completed in 2019, the luxury development comprises 10 residences with 698 one–four bedroom apartments and just 4 exclusive 5-bedroom penthouses with 360-degree waterfront views, as well as 17 townhouses.
Each residence is allocated 1-2 parking spaces. Exclusive amenities including state-of-the-art gymnasiums, swimming pools, landscaped gardens, basketball courts and children’s play areas, as well as a 869 ft pedestrian bridge connecting the island to the mainland, are available to all residents of the community. There’s also Madame Tussauds Dubai on the island, which is just a short walk away from the residential buildings. The main highway in the emirate, the Sheikh Zayed Road, is also within easy reach by car.
The minimum price for a 1-bedroom apartment in Bluewaters Residences in February 2023 was AED 3,000,000 (USD 817,000).
Apartments, penthouses and townhouses in the complex of ⭐Bluewaters Residences⭐ in Bluewaters Island. Developer Meraas Holding offers units for sale at favorable prices.
Raffles The Palm Dubai
Raffles The Palm Dubai is a 5-star ultra-luxurious resort complex by Royal Group, located to the west of the Palm Jumeirah Crescent. In addition to hotel rooms, the development includes a limited collection of 4-bedroom serviced villas with temperature-controlled rooftop swimming pools. Each of the villas has four levels, with living spaces ranging from 8,363 sq. ft to 9,343 sq. st. ft and courtyard areas varying between 7,481 sq. ft to 11,808 sq. ft. All residences have premium finishes and are equipped with exclusive furnishings, including handmade items from Italian brand Francesco Molon, a spa and a jacuzzi. Villa owners also have access to a 1,640-ft-long private beach, with sand sourced from the Maldives. The minimum purchase price for a villa in Raffles The Palm Dubai is AED 52,100,000 (USD 14,190,000).
Raffles The Palm Dubai
Villas in the complex of Raffles The Palm Dubai on the West Crescent of Palm Jumeirah. Developer Royal Group offers units for sale at favourable prices.
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- Ready-Made Properties and Off-Plan Projects: Market Trends in 2022-2023
- Ready-Made and Off-Plan Properties: Main Advantages and Disadvantages for Buyers and Investors
- Top 5 Ready-to-Move-In Projects in Dubai