Dubai: A number of high-end off-plan properties, each costing Dh20 million upwards, have gone up for sale in the last few months, leaving many wondering whether they would have any takers. But evidently, there are people out there who would rather invest such huge amounts in an off-plan rather than in a ready property.
According to Reidin.com, a real estate information company, 25,526 off-plan units were launched in Dubai last year, of which the costliest unit was a 3,361 square foot apartment in One JBR, selling for a whopping Dh30 million. Another 6,809 square foot apartment in The Address Residences Dubai Opera (Tower 1) was priced at Dh27.4 million, while a third in The 118, Downtown Dubai went for Dh22 million.
Other top luxury off-plan sales were also seen at The Address Residence Sky View where an apartment sold for Dh25 million and One at Palm Jumeirah for Dh21 million.
Big draw
Flexible payment plans, trust in developers and attractive premiums that these properties fetch on completion are the main reasons why luxury off-plan properties continue to be a draw, say experts.
Ozan Demir, research and data manager of Reidin.com, said when a new project is launched, one can expect premiums of at least 10 to 15 per cent after its completion depending on the developer and location. “Compare that to a ready property in the market – there is barely any premium being recorded. Prices of a ready luxury property are static or falling.”
He said, “Most developers are offering flexible payment plans which are easy on the buyer’s purse. In the case of a ready property, the down payment is at least 30 per cent and this means the buyer has to dole out a lot more cash.”
According to him, the return-on-investment (ROI) for a ready luxury villa is currently around 3.5 per cent of the property value and for an apartment 5.5 per cent. “Most high-end launches are coming from big developers whom people trust and know will do a good job at the end of the day. The risk of non-delivery is practically not there,” said Demir.
In Abu Dhabi too, a luxury villa development under construction in Saadiyat - Hidd Al Saadiyat – has seen six-bedroom villas commanding Dh16 million.
“One of the main attractions of this property is its location. Nearly 80 per cent of the development is sold out,” said Cristy Williams, senior sales agent – Crompton Partners Estate Agents.
