Nestled among the dunes of the Arabian desert, the city of Dubai is renowned the world over for its towering skyscrapers, bustling nightlife, and luxury shopping opportunities. While it has long enjoyed its reputation for glamour and adventure, global attention on the city has certainly intensified in recent years, driven by its hosting of major sporting events and many innovative construction projects. Put simply, Dubai is the place to be in 2024.
Given the gigantic sense of excitement surrounding Dubai – coupled with its strong and stable economy – it’s small wonder that so many international investors have flocked to the United Arab Emirates’ [UAE] most populous city. In 2022, for example, the total value of foreign direct investment [FDI] into the UAE was $22.7 billion, with FDI in Dubai specifically having increased by 80% year-on-year [YoY]. Moreover, the number of new FDI-backed projects in the city hit 1,173 in 2022; an increase of 89% on the previous year’s figure. While there is a plethora of opportunities for investors to discover in Dubai, one area that has recently seen an all-time high in investments is the city’s off-plan property market. Indeed, the volume of off-plan transactions recorded in 2022 increased by 47.9%, with the sale value appreciating by more than 60%. But what exactly is driving this segment of the market’s incredible growth?
Why the city is such a hit with international investors
Much of the popularity that Dubai’s off-plan market now enjoys can be linked to the staggering success of the Burj Khalifa project. Completed in 2009, this neo-futurist building in the heart of downtown Dubai is the world’s tallest structure, standing at 829.8m in height. It is an achievement of monumental proportions, and a beacon to human progress and potential. The project involved an unprecedented level of international cooperation, and simply wouldn’t have been possible were it not for the vast amount of overseas investment that went into its construction. With over 17 million people visiting the building every year, the Burj Khalifa is estimated to generate more than $697 million in annual ticket sales alone, positioning it as the world’s number one landmark in terms of tourism revenues. Given its amazing success, therefore, the structure has been crucial in proving that investing in Dubai’s off-plan properties can yield significant returns on investment, which has caused many more investors to flock to the desert metropolis.
The Burj Khalifa was, of course, an exceptional project, but there are plenty of fantastic benefits to investing in other off-plan properties throughout Dubai. Besides the common advantages associated with purchasing off plan– such as securing the property at a lower cost than its expected value upon completion – doing so in Dubai specifically can allow for significantly lower upfront costs, as well as flexible payment plans to meet your particular budgetary needs. This makes entering the market considerably more accessible for those who don’t want to invest significant sums up front. Furthermore, payment schedules can be modified in line with investors’ personal financial goals, adding to the level of flexibility involved with off-plan investing.
Flexibility is not limited merely to the payment process, however, but also extends to the customisation of off-plan units themselves. This is because many of the city’s developers offer investors options to tailor properties to their preferences, allowing them to improve the overall living experience while increasing the resale value of units. As such, this presents a highly appealing proposition for investors who want to invest in top-of-the line, off-plan properties located in luxurious developments, which boast the very finest facilities and finishes.
While there are risks associated with investing in off-plan properties – as there are with any other type of investment – these dangers are largely mitigated by the UAE’s Real Estate Regulatory Authority [RERA] and Dubai Land Department [DLD]. These Government bodies have introduced protocols designed to safeguard buyers from potential delays, cancellations, or fraudulent activities that might otherwise serve to derail their investments. Among these protocols is a law mandating that off-plan payments can only be made at institutions that have been approved by DLD, while developers will only receive funding after the project has reached a specific point of completion. This not only ensures that investors are better protected from scammers and other nefarious players, but also demonstrates the Dubai Government’s commitment to foreign investment.
Find out how we can help
With so many exciting opportunities available, the fantastic growth of Dubai’s off-plan market is hardly surprising. International investors who are yet to discover all that the city has to offer them should waste no time in learning more – not least because the sooner they get into the market, the sooner they will begin to reap its rewards. Due to the diversity of the market, however, we appreciate that reviewing all available investment options can be a challenge. As Hunter Jones is actively involved in Dubai and has extensive knowledge of its off-plan market, we are ideally placed to guide international clients through the investment process in the city. Therefore, we would encourage anyone who wants to get in on Dubai’s off-plan property market to get in touch with us today!
Comments