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Ready-to-move-in properties in demand as prices fall in Dubai

UAE - March 3, 2019

The best deals in Dubai real estate can be found in new build, ready-to-move-in properties. This is effectively newly built supply, which has been completed and still sits on the developers’ stock sheet. This property segment tends to come with flexible payment terms and the ability to negotiate on prices.

There are lucrative deals to be had in the off-plan market, the recent slowdown in off-plan sales shows a higher percentage of buyers opting for ready units or units reaching completion as they prefer immediate occupation. The majority of off-plan properties being sold is sub Dh1.5 million.

With over 21,700 homes delivered in 2018, the highest number of deliveries since 2011, sales prices are expected to remain under pressure in the foreseeable future.

Sales prices will continue to drop in 2019, however, the rate of decline is expected to slow towards the end of this year. It is important to note though that as rents are likely to fall more than sales prices, this needs to be factored into the investment calculations.

The steady decline in sales prices for completed projects has increased affordability and opened the market to a wider investor pool and facilitated a rise in end-users and first-time buyers. The Dubai Land Department announced that there were 9,500 first-time buyers between January and August 2018.

Transaction volumes in the ready sales market, both for cash and mortgage transactions, has seen a steady increase over the last three years. The average unit prices in the secondary sales market have also shown resilience.

This indicates strength in the secondary market where offer and demand are finding an equilibrium and more buyers are opting for ready units instead of off-plan units as they look to either transition to ownership and save on rents or look for immediate rental yields.

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