During the last quarter of every year, Dubai Real Estate has always experienced rush hour games when it comes to delivering offplan projects in time. Despite setting very high targets through aggressive launches throughout 2016 and 2017, there is a lot that needs to be done in order to achieve the targets set by developers themselves, and in order to set a benchmark for expectations, it is important to analyze previous performances of offplan deliveries to understand what best can be expected of industry in coming years.
The real estate industry of Dubai as it stands has reached a stage where the completion of these projects will play a critical role for the success and future outcomes of the industry. In the past couple of years, a lot has been promised and the start of 2018 will be the time when those buyers will start to expect handovers and reap the results on their investments. Interestingly since last year there has been a major shift in the profiles of the buyers which led the offplan sales to supersede over ready properties first time after 2009, where the flexibility in payment plans played an eminent role in encouraging current tenants to invest in their future homes which they are supposed to get handed over during 2018 and 2019.
Looking at the statistics where Dubai Real Estate had planned a delivery of 29,158 units during 2017, out of which almost 8,000 have been delivered this year and another 5,000 are most likely to be delivered by end of December 2017, which brings about to the similar previous performance of delivering 10,000 homes every year. One of the major element that has been improved over the years in delivering offplan projects is the fact that over 60 projects comprising of 17,000 homes are more than 80% completed this time around according to RERA inspection reports, which brings about a new a hope for a better performance from the industry in near future. Apart from the regular launches from the industry leaders like Emaar, Dubai Properties, Nshama, Meydan, Deyaar, Azizi and Damac, the stepping in of contractors as developers likes Shapoorji Pallonji and Sobha within the market was another significant move, since the expertise required to build quality homes was already available with them.
Furthermore, the rents in different parts of Dubai which have been declining over the past few months will also be dependent highly upon the delivery of these offplan projects, because the majority buyers of these affordable offplan developments are end-users, and they intend to move into their brand new homes once they are delivered which will bring about a major change in dynamics within rental industry of Dubai. The timely delivery of Town Square Dubai’s and Reem’s Townhouses and Al Furjan apartments along with other projects in JVC have surely populated newer communities in wider areas of Dubai, however the expert still predicts that the chances of oversupply of units are very minimal since the ambitious infrastructure and business plans of Dubai are on a roll, and all this will be resulting exponential increase of population and tourists in near future.
Nonetheless, every industry around the world has its capacity to perform, and largely the performance depends upon the major players within that industry, whereas the smaller players do contribute their shares which usually follows the flow of competition. Once these offplan deliveries that are promised from early 2018 till 2020 are on time, the investors who had invested in the offplan already two years back and are seeking to reap from these projects will surely be floating this money again within the market and a substantial movement is predicted once the flow moves on.
Author: Mohsin Ayub, Marketing Strategist – Homes 4 Life