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Ready housing: worth or not buying in Dubai?

19.03.2019
Ready housing: worth or not buying in Dubai?

The volume of ready sales transactions in the Dubai real estate market is growing, and the average prices are resistant to decline, in contrast to the off-plan sector. Read more to find whether it is worth considering the purchase of ready housing in Dubai.

Taking into account the fact that last year more than 21,700 new real estate units were delivered — the largest annual volume since 2011 — it is expected that prices in Dubai’s real estate sales sector will stay under pressure this year. However, the main UAE’s consultancy Core has noted in its latest report that the volume of transactions in the ready-made properties market (both cash and mortgage) has steadily increased over the last three years.

Besides, despite the general decline in prices in Dubai’s real estate sales sector the average cost of housing in the secondary sales market has demonstrated its resistance. And both of these two latest trends clearly contradict to what is observed in the off-plan (under construction) sales market.

This indicates healthy stability in the secondary real estate market, where supply and demand tend to balance, and more buyers are opting for ready-made homes, rather than properties under construction, for they either want to move into their own homes and save on rent, or seek immediate rental income.

Speaking of prices decrease in the ready-made real estate market as a whole, the Core report highlights some prestigious areas, where prices were most resistant to decline: “In areas such as Palm Jumeirah and Dubai Marina, where prices have decreased by only 3% to 8%, respectively, only moderate decline and relative price stability have been observed, while Downtown Dubai continues to be under pressure from existing and future new housing launches, experiencing a 12% price decline.”

“The market can reach equilibrium over the next 12–18 months with a slowdown in price cuts and anchoring them at the same level”, Declan King, head of the real estate group at Valustrat agrees.

“It is possible that many properties will be worth less at the end of this year,” he says. “For owner-occupiers getting the right property in their preferred area, this is a good time to do a deal.”

“As a result of the price fall in the secondary market, a villa in The Springs or The Meadows that four years ago hardly had any demand, presents a good option for buyers even if they have to upgrade the kitchen, wardrobe or the garden,” he says. “People are getting back in these areas because of the price points.”

A research conducted by ValuStrat revealed that many tenants have moved into their own, recently purchased homes in a couple of previous years.

“Tenants are encouraged with monthly mortgage repayments being less than their rent. However, one big obstacle is the amount of deposit required to buy. In effect this means that many buyers have to stump up almost 35% of the purchase price to cover down payments and other costs of buying a home,” says the report.

And if one will have a desire to compare two sectors, the off-plan? And the ready-made, today they will also find generous offers from developers, which minimize these advance payment costs. For example, you can buy a 667 sq ft-sized studio in the KIARA community at DAMAC Hills from DAMAC at a price of USD 177,000, and the amount of the advance payment will only be 12%, not 35%! In addition, primary costs will be reduced due to a 50% discount for a purchase deal registration at the Dubai Land Department (2% instead of 4%). Well, it goes without saying that off-plan Dubai developers now are being so generous that are even eager to provide really prolonged payment periods for their units after completion. And the completion dates are often quite close (1-2 quarters).

So it’s up to you to decide what to choose: ready-made housing or real estate under construction nearing completion. Whatever you opt, IMEX Real Estate will help narrow the search in the selected category and find the best option. Our contacts:

Tel. in Dubai, UAE: +971 (50) 2528188 (Whatsapp, Viber, Telegram)

Toll Free Dubai: 800-IMEX (800-4639)

IMEX REAL ESTATE BROKER LLC, UAE

Office 2502, Marina Plaza, Dubai Marina, Dubai, UAE

Email: pm@IMEXre.com

Skype: resident69

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  • client base of the agency;
  • profile exhibitions, etc.
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None

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