Off-plan property prices in Dubai experienced a dip in August after a period of strong growth, signaling a recalibration towards price equilibrium. Analysts suggest that while prices are trending lower, it does not indicate a weakening market but rather a healthy adjustment as investors are showing a preference for ready-to-move-in properties. The average price per square foot for off-plan sales decreased by 4.2% in August 2024 compared to the previous year, reflecting a natural balancing after rapid growth driven by an increase in new project launches.
Emirates NBD Research reported that off-plan properties accounted for 66% of total transactions in August, indicating a continued demand for such properties in the market. While overall market sentiment has improved, the off-plan segment has seen a significant increase in transaction volumes over the last few years. In 2018, 17,600 off-plan units were sold in Dubai, whereas over 69,100 units were sold in the year through August 2024, showcasing a substantial jump in transaction activity. This trend suggests that more investors are turning towards off-plan properties as an investment option.
The demand for ready properties has been on the rise, with buyers seeking immediate returns through rental income or occupancy rather than waiting for construction to be completed. In the first quarter of 2024, ready properties accounted for 54% of all transactions compared to 46% for off-plan properties, signaling a shift in investor priorities. Existing properties saw a 30% increase in transaction volume in Q1 2024, indicating a growing preference for ready homes among investors.
One factor contributing to the decrease in off-plan prices is the aggressive launch schedule of 2023, resulting in pricing adjustments to remain competitive. Investors are also becoming more risk-averse, opting for the security of ready-to-move-in properties over the uncertainties associated with off-plan projects. The market stabilization is viewed as a positive development following the unprecedented price growth in 2023, with a period of consolidation and more measured growth expected. The shift towards ready properties is helping to normalize off-plan prices while still offering opportunities for both developers and investors.
