Is off-plan losing its shine?:
The past few years saw a sharp rise in off-plan property sales across Dubai, driven in part by competitive prices and flexible payment terms offered by developers. Off-plan sales accounted for 58 per cent of transactions in 2016, increasing to 67 per cent last year, according to research by ValuStrat. As of the third quarter this year, off-plan sales already account for 60 per cent of transactions.
Off-plan particularly dominated property sales in established communities such as Downtown Dubai, which saw 85 per cent of total sales in the third quarter being off-plan, Business Bay (84 per cent) and Remraam (75 per cent), ValuStrat further reported. According to analysts, this reflects a general sentiment of buyers and underlines the most glaring concerns towards off-plan units.
“There are still various uncertainties surrounding the off-plan market, which means it also has risks,” said Jenny Weidling, research and advisory manager at Asteco. “Delays remain an issue, with developers having limited obligations to pay penalties if the project is not handed over on time. This causes issues for buyers who are end users and are looking to live in their units, rather than rent them out or sell them as an investment, since any delay can affect their ability to vacate their current property, which may be rented.”
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