Your Portal to UAE Property Market: The Selling Dubai Perspective!
Unpacking Dubai's Evolving Real Estate Landscape: An Exploration of Recent Market Trends and the Emergence of Tokenization.
Greetings, I'm excited to welcome you to the second edition of "Selling Dubai," a newsletter aimed at keeping you in tune with the pulsating and rapidly evolving real estate scene in the United Arab Emirates. I'm Courtney Costello, delighted to continue serving as your guide through this compelling journey.
You may remember me from my affiliation with the Oppenheim Group in San Diego, CA a renowned real estate firm that reached global prominence via the Emmy-nominated Netflix series, "Selling Sunset." The intense market atmosphere of Southern California has helped to refine my skills and ignite an undying passion for real estate.
⭐️DUBAI REAL ESTATE OVERVIEW⭐️
1. Dubai Sparkles in 2023: Claiming the Throne in Luxury Real Estate, Surpassing London, NY, and Paris
A recent market report reveals that, between January and June, there were 176 luxury property transactions in Dubai that each exceeded $10 million. Some of these sales made major headlines due to their high value.
What do we know?
In 2023, Dubai's real estate market did more than just thrive; it made history. With nearly $850 million generated from high-end residential units costing upwards of $10 million in the first half of the year, Dubai has outperformed luxury property markets in London, New York, and Paris. Noteworthy sales include a penthouse in the Bulgari Lighthouse residence that sold for a staggering $111.6 million. Furthermore, Dubai has seen a boom in off-plan sales, and average residential property sale prices across the city have increased by 17 percent.
Why Is It Important?
This shift in global property trends is significant because it indicates a new direction for the luxury real estate market. Dubai's rise to the top of the market is a reflection of the city's growing appeal to high-net-worth individuals and the increasing value investors are finding in its properties. The surge in demand has also had a ripple effect, with off-plan sales making up about half of all property sales in the first half of 2023.
Why does it matter?
Dubai's rise as the world's leading luxury property market isn't just a title; it indicates economic strength and international confidence in the city's future. This shift could lead to further investments in the city, attracting even more wealth and development. The growth of Dubai's real estate market not only benefits those invested in the industry but also contributes to the overall economic health and future prosperity of the city.
2. Riding the Real Estate Wave: How Off-Plan Properties are Fueling Dubai's Market Boom
We're talking about a remarkable investment opportunity in the Dubai real estate sector that revolves around off-plan properties. Continuing on, The resurgence of this trend, thanks to Dubai's booming population and the resulting high demand for rentals, is creating a lucrative landscape for investors - offering flexible payment plans and the prospect of price appreciation by the time of completion, which is exceptionally appealing in the current environment of high-interest rates.
➡️UNDERSTANDING KEY FACTORS IN DUBAI'S 'OFF-PLAN PROPERTY' MARKET⬅️
Dubai's off-plan property market (Off-plan property is a property being marketed while in the pre-construction stage or under construction) is booming due to the city's rapidly growing population and increasing demand for rentals.
This trend has been encouraged by experts in the real estate industry, like Kulwant Khurana, Off-Plan Manager at Betterhomes, who states that off-plan properties are a lucrative investment strategy.
However, Khurana also warns of potential risks, such as project cancellations and difficulties in getting refunds.
Betterhomes properties are experiencing high occupancy rates, indicating a sustained demand for rentals. Occupancy rates reach 95% for freehold properties and 97% for leasehold properties.
The current global situation of high-interest rates and rising mortgage rates makes off-plan properties a more profitable investment than ready properties, despite the increase in rent yields.
Off-plan properties offer investors the flexibility of payment plans that help manage the impact of high lending rates.
Ayman Youssef, Managing Director of Coldwell Banker UAE, agrees with Khurana's sentiments and adds that off-plan properties are more investor-friendly due to benefits like price appreciation, flexible payment plans, and attractive offers from developers.
Last year, off-plan property sales accounted for 55% of overall sales volume and 56% of total sales value in Dubai.
Top districts for off-plan buyers include Dubai Marina, Palm Jumeirah, and Dubai Harbour among others.
Simon Quinton, Off-Plan Manager at Colliers, views off-plan as an excellent option for expats in Dubai, aligning with the UAE government's plans and proposals such as the Dubai 2040 Urban Master Plan.
Quinton, Khurana, and Youssef all emphasize the importance of thorough research and risk assessment before investing in off-plan properties.
Investing in off-plan properties is an individual decision and varies based on factors like immediate cash flow, purpose of purchase, and occupancy plan.
Investors need to consider the overall real estate market conditions in Dubai, including the supply and demand dynamics for the property type, the rental market potential, and future development plans.
Despite the risks, informed investors can unlock profitable opportunities in off-plan properties.
3. TOKENIZATION OF REAL ESTATE
From my perspective, I'm thrilled to bring to light the immense potential tokenization holds for Dubai's off-plan real estate sector. Just as I've bridged gaps in the competitive Southern California market, I see a unique opportunity to level the playing field in Dubai by promoting fractional ownership of properties internationally.
Tokenization holds the key to democratizing this dynamic real estate landscape - it's about inviting more participants to the investment table, thereby enriching and diversifying our community of investors.
Moreover, tokenization stands to inject a dose of liquidity into the off-plan property sector, ensuring the buying and selling process becomes smoother, quicker, and more accessible. As a seasoned real estate professional, I understand the importance of trust and transparency.
With tokenization, backed by robust blockchain technology, these attributes are inherently inbuilt. This could prove especially critical for off-plan properties, known to bear inherent risks such as project delays or cancellations.
Peering into the crystal ball of the future, I see tokenization paving the way for inventive real estate investment platforms. The possibilities are truly staggering - decentralized real estate exchanges, tokenized real estate funds, and more.
As a guiding force in this vibrant market, I'm excited about how tokenization can bring Dubai's real estate scene to the next level. Especially internationally.
🪄ABOUT COURTNEY🪄
Courtney Costello, renowned for her exceptional work in San Diego's real estate market, is now bringing her expertise to Dubai. With a passion for architecture and a keen interest in the tokenization of real estate, Courtney is venturing into the dynamic UAE market.
Known for her commitment to excellence, she has been recognized with prestigious awards such as the 'Recognition of Excellence' Silver award and the 'Rising Star Real Estate Agent' award. Courtney's background in residential leasing, interior design, and high-end retail sales equips her with a unique skill set that she applies to real estate negotiations and marketing.
Now, as part of her new journey in Dubai, she aims to leverage her expertise and the global network of The Oppenheim Group to provide a personalized and unmatched client experience in the UAE real estate market.
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