As it stands, Dubai’s off plan property market is booming. In some cases off plan property in Dubai is being bought-up by investors, just about as fast as the developers can release them. Other off-plan property developments may take some time to gain traction, but almost like clock-work, come handover, over 90% occupancy is overwhelmingly common.
Market Saturation Signs and Concerns
Despite several rumors of economic down-turn in recent months, developers have not slowed in their pursuit to grow and nurture the already-flourishing Dubai real estate landscape. For better or worse, developers are confident in the stability and strength of Dubai’s current and future property market. As we progress nearer to what is anticipated to be the biggest economic turning point since the UAE’s discovery of oil, many investors are worried about the very real threat that Expo 2020 poses. A ballooning of confidence amongst developers that 2020 will bring the demand to match the supply of available residential and commercial property, can be seen as somewhat worrying, or even irresponsible. A few experts have gone so far as to imply that Dubai is not playing it safe; but then again, when did Dubai ever play it safe?
Dubai is renowned for making the impossible, possible. Ski slopes in the desert, awe inspiring man-made islands, the largest towers in the world etc. have transformed this Bedouin village into a world-renowned economic power-house. The major property developers in Dubai have been around since the sand-dunes and have been closely welded to Dubai’s growth. Their confidence in the market should mean a great deal to investors. In Dubai, if you ever see a developer put on the brakes, only then is it time to worry.
Are the Concerns Valid for Off Plan Property in Dubai?
Of course! The vast majority of off plan property in Dubai, launched in 2015 and 2016, has been committed to a handover date within the range of Q2 2019 to Q1 2020; just before the Expo. With the market bordering on capacity, experts are worried Expo 2020 will not bring the demand. Furthermore, there is a risk that an over-supply of new property will cause property prices to drop, triggering property investors to liquidate their investments, adding an over-supply of secondary market properties to an already saturated property market. Although it sounds bad, this is far from the recipe for an economic disaster. Regardless, there is a concern that Expo 2020 will tame the property value curve that has been on a rabid incline for the past few years.
Has this Stopped or Slowed Investment?
Investors know that any investment worth their attention does not come without a degree of risk. What’s important is to weigh the reward against the risk of a slowed property market. For a property investor, these are risks that must be taken; however, there are safety nets to almost ensure that investors come-out ahead, no matter the impact of 2020. Zola Group has seen increased attention by investors in properties that tick at least one of these boxes:
- Off plan property in Dubai intended as low-income housing
- Off plan property on or near the new Dubai Metro line
- Off plan properties with contractually guaranteed rental yields of 8% or more for at least 3 years after handover
- Commercial properties (off plan or ready) in popular districts
- Serviced apartments/Hotel apartments
- Off plan property with handover before Q3 2019
The risk associated with Expo 2020 has not stopped or slowed investments in off plan property in Dubai. It has simply caused investors to reallocate and diversify their investments, to weather a changing economic climate.
The expert property consultants at Zola Group can assist you in your property buying needs by providing knowledgeable and experience-driven advice to property buyers in the UAE and around the world. You are welcome to Contact us at to speak with a property consultant today.
Zola Group Real Estate Services are available to local and international clients looking to take advantage of the highly rewarding property market in Dubai and the UAE. You're invited to contact our property consultants via email or phone to learn more about our specific services or to inquire about current real estate opportunities. To view current property listings Click Here.