Dubai's Property Market Surges with Low Down Payments and Golden Visas, Setting Record Q1 Sales

Dubai's Property Market Surges with Low Down Payments and Golden Visas, Setting Record Q1 Sales

Dubai's off-plan property sales are being fueled by Golden Visas and luxury homes, with further growth expected.

The Dubai property market is experiencing a surge in off-plan sales, with developers offering down payments as low as 5-10%, along with complete waiver of registration fees and other charges. In some cases, buyers can secure a home with a down payment as low as 1% or even a flat Dh50,000.

Investors are now more focused on the size of their upfront payments than on the duration of their 3-5 year post-handover payment plans. The Golden Visa program, which requires a minimum Dh2 million investment in property, is also attracting first-time overseas investors to the market. Additionally, demand for luxury properties remains high, with buyers turning to new, super-premium off-plan projects due to a shortage of similar ready homes on the market.

Offplan Surge in the Horizon?

The Dubai real estate market has experienced significant growth in Q1 of 2023, with almost 31,000 homes sold. This represents a 50% increase compared to Q1 of 2022, marking the best performance for Dubai residential sales in a decade, according to data from DXBInteract.com.

The reduction in the property investment limit for 10-year visas from Dh10 million to Dh2 million last year has attracted a broader base of property buyers, particularly those planning to relocate to the UAE. According to a business consultancy expert, “The revised GV program was instantly affordable to a swathe of buyers who earlier might have launched a business here but not considered a property purchase immediately.”

Aldar – Escalating offplan sales

Dubai developers are confident that the off-plan property sales boom still has significant potential, as evidenced by the heavy off-plan launch activity in Q1-2023, which was the most significant since 2017-18.

Emaar, Damac, and Sobha Realty in Dubai, Aldar in Abu Dhabi, and Arada in Sharjah have confirmed sales backlogs, leading developers to believe that they cannot afford to wait and see if the boom will last.

According to the CEO of a mid-sized developer, launching now is critical to avoiding the competition from new projects if they do it later. Aldar's three mega-communities and Nakheel's upcoming projects, according to the CEO, are the big elephants in the Dubai off-plan room that will immediately increase competition for off-plan sales.

Developer’s Inducements

The luxury property market in Dubai is seeing limited incentives due to obvious reasons. However, sales of $10 million homes finished Q1-2023 on a solid footing, indicating the possibility of setting a new record tally by year-end.

As the property price chain goes down, the market is witnessing more incentives for buyers, with down payments being brought down to as low as 5%. Analysts note that unlike in the past, down payment requirements are potentially posing issues for buyers due to higher mortgage rates, inflation expenses, etc.

Therefore, developers are now focusing on lowering the burden on initial payments, rather than longer post-handover payment plans, to ease the way for first-time investors and end-users. If the sales boom continues in Q2-2023, as early April numbers from the Dubai Land Department suggest, developers in Dubai will be justified in doing everything possible to ease the point of entry for buyers to keep the boom going.