17 November 2017
Dubai: A Rose by Any Other Name
A year-on-year comparison reveals that transactional activity is on the rise. In the first 10 months of 2017, total activity has already surpassed the full year of 2015 and 2016. On an annualized basis it is expected to have an increase of 32% compared to the year before. The main contribution for the increase is attributed towards the sales from the off-plan market.
Regarding concerns that off-plan activity is replacing demand in the ready space; these do not appear to make sense because it represents investments in the sector; moreover, it is natural in a sector where the supply of ready stock is expected to double in the next 10 years (similar to what transpired in the last decade).
Investments in the off-plan space may be distorted due to generous payment plans; however still represents a substantial increase in investments; a trend that we expect will continue for the next few years. Real estate price indices that do not factor in off plan activity therefore are fundamentally flawed.