Completed homes vs. off-plan properties: A significant shift in demand for UAE real estate

As the supply of ready villas drops in 2022, ready apartment buildings with larger floor plans and robust community offerings are performing well.

As a result of the Covid pandemic, which has continued into the first quarter of the year, the real estate market in the UAE is seeing a significant change in consumer behaviour.

In contrast to off-plan homes, completed residential units are increasingly more popular in the real estate market.

According to figures issued by the Dubai Land Department, sales throughout the first quarter of the year were reflective of this, with finished units accounting for 70% of all transactions.

Key trends in the UAE real estate market for 2022:

• Due to low mortgage rates, more end users are continuing to purchase throughout the city
• In low-density areas, buyers are opting for larger living spaces
• The first quarter of 2022 saw an average sales price increase of 11%, primarily as a result of purchases of luxury villas
• As the supply of ready villas decreased, ready apartment buildings with larger spaces and a robust community offering also did well

Demand shifting from apartments to villas

Currently, apartments make up the majority of all completions in the first quarter of 2022, since the supply of new villas is constrained by a shortage of pipeline and stock.

Due to the restricted supply of villas in prime Dubai areas and the low number of projected deliveries (3.6%) in these submarkets in 2022, prices are expected to remain high.

Large developers unveiled around 10,000 new townhouses and villas in May 2022, however, handover for these complexes isn't anticipated until the end of 2024 or 2025.

Only 5% of the villas being built are in prime market locations, which will help keep prices in those regions stable. Of the villas being built, 30% are in upscale communities with golf courses, notably Dubai South, Dubai Hills, and Arabian Ranches 3.

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