Dubai luxury property sales boom with Dh2m Golden Visas in Q1

By Ghulam Haider

The Dubai real estate market is experiencing a notable increase in off-plan sales, as developers offer attractive discounts of 5-10% on down payments, along with complete waivers of registration fees and other charges.

Some projects even allow buyers to secure their property purchase with down payments as low as 1% or a fixed amount of Dh50000. Rather than focusing on post-handover payment plans spanning over 3-5 years, investors are now more concerned about the size of their initial payment.

The Golden Visa programme, which requires a minimum investment of Dh2 million in real estate, has also seen a surge in demand in the Dubai property market. This programme has become a significant driver for attracting first-time foreign investors to purchase properties in Dubai, market insiders say.

Further, the luxury segment of the Dubai property market is experiencing an unprecedented demand, with buyers increasingly turning to new, super-premium off-plan projects due to the limited availability of similar ready-made properties for sale.

In Q1 of 2023, the Dubai real estate market has shown significant growth, with a remarkable 50% increase in sales compared to the same period in 2022. According to data from DXBInteract.com, nearly 31,000 residential properties were sold, representing the best performance in the past decade.

The sustained demand for luxury homes and the increasing popularity of the Golden Visa programme are the primary reasons for this growth. The reduction of the property investment limit for the 10-year visa from Dh10 million to Dh2 million in 2022 has expanded the potential pool of property buyers.

This change is particularly appealing to those planning to relocate to the UAE, who may have previously considered starting a business in the country but not purchasing property. As noted by a business consultancy, the revised Golden Visa programme is now more affordable for a broader range of buyers.

Dubai developers remain optimistic

Despite the challenges posed by the current economic climate, Dubai developers remain optimistic about the property boom’s continuing success. The first quarter of 2023 saw a surge in off-plan launches, which was the highest since 2017-18.

Developers are confident in the confirmed sales backlog of prominent real estate companies such as Emaar, Damac, Sobha Realty in Dubai, Aldar in Abu Dhabi, and Arada in Sharjah, as evidence that the boom will continue.

One mid-sized developer’s CEO pointed out that Aldar’s looming presence and its plans for three mega-communities in the coming months are the big elephant in the Dubai off-plan market. The soon-to-be-relaunched projects from Nakheel will also increase competition for off-plan sales, emphasizing the need to launch projects now instead of later to stay ahead of the competition.

Developer ‘sweeteners’

The luxury property market in Dubai offers limited incentives; however, sales of $10 million homes in the first quarter of 2023 have performed well, setting the stage for a possible record-breaking year-end tally. On the other hand, the lower price range of the market is witnessing an increase in buyer incentives.

Developers are offering reduced down payments, with some even offering as low as 1% of the property value or a token amount of Dh50000. According to an analyst, down payment requirements have become a potential hurdle for buyers due to higher mortgage rates, inflation expenses, and other factors.

To ease the way for first-time investors and end-users, Dubai developers are prioritizing reducing the burden on initial payments rather than emphasizing longer post-handover payment plans.

The sales boom shows no signs of slowing down, and early April data from the Dubai Land Department indicates a bullish trend that justifies developers’ efforts to make the point of entry for buyers as easy as possible. As long as the boom continues into the second quarter, developers will likely do everything in their power to sustain it.