Dubai’s off-plan real estate sector sustains the overall UAE property market
23 May 2023, Zawya
35% of the UAE believes technological solutions must be adapted and 63% of the population is willing to pay more for properties that emit less carbon emissions
95% of units at ZāZEN Gardens are sold out and the development will reduce around 470 metric tonnes of annual carbon emissions upon completion
Dubai, UAE – Last month, sales in the UAE’s real estate industry decreased for the first time in 2023 as the country saw a 33% dip in transactions in April 2023 when compared to December 2022. The secondary market witnessed a 2.4% decline in sales but according to ZāZEN Properties, a leading sustainable property developer in the UAE, the off-plan sector’s 42.5% year-over-year (YOY) spike in sales transactions in April is sustaining the growth of Dubai’s property market.
Investors prefer buying off-plan properties versus ready real estate projects as return on investment (ROI) for such developments can reach up to 10%, depending on location, quality of build, and the selection of amenities. With the UAE’s economic stability, especially compared to other countries worldwide, overseas investors have increasingly turned towards Dubai as a secure method of capitalizing on investments across all industries, and even more so in the real estate sector. Hence, many rationalize the slowdown in sales transactions in April as a temporary trend that was the byproduct of factors such as Ramadan, shortened working hours, and the holiday season.
Demand for apartments has been exceptionally high as the UAE’s lack of property taxes and rental income taxes has been known to make ROI more profitable than other countries and this is attributed to stable demand from the local population and tourists. Moreover, it has seen developers increasingly build units that address modern needs. In line with this agenda, green developments are also seeing greater interest in recent years. This trend is expected to remain a staple for the foreseeable future with initiatives like Dubai 2040 Urban Masterplan and UAE Net Zero 2050 requiring immediate change for future prosperity.
A recent survey of more than 1,000 respondents shows that 61% of people living in the UAE believe climate change is real and that they cite human activity as the leading cause. Furthermore, 35% of participants think technological solutions must be adopted; 61% are ready to pay more for everyday products made from recycled materials and 63% of people showed a willingness to pay a little more for properties that emit fewer carbon emissions (CO2).
With 2023 being declared the Year of Sustainability, and Conference of Parties 28 (COP28) fast approaching, property developers will increasingly play a crucial role in the UAE’s ability to achieve global and regional green targets. This will continue to be the case as the country’s first-place world ranking for talent attractiveness is an additional factor that will aid the Dubai 2040 objective of doubling the emirates’ population to around six million people over the next 17 years; sustainable housing infrastructure will be required to accommodate this influx of residents.
Madhav Dhar, the co-founder and COO of ZāZEN Properties, stated: “The UAE is moving at an accelerated pace compared to other countries around the world and this is correlated to various factors including the country’s diverse population of more than 40 different nationalities. Dubai’s unique economy is only being bolstered by initiatives such as D33, alongside a new segment of home-seekers who are open to staying in the emirate long-term and fostering the well-being of the UAE’s real estate health. Additionally, as we inch nearer to a more sustainable future for the world, an increased focus on green integration will be seen in off-plan projects from developers in the country and region alike. All these aspects, paired with other incentives, such as tax advantages and a growing number of Golden Visa issuances, will help sustain the market’s overall real estate growth, particularly in the face of slower performing months.”
Despite a slowdown in sales transactions in April 2023, the UAE’s property sector has consistently flourished with a renewed strength in recent years. Industry analysis cites that this momentum is set to continue, at least for now, a sentiment that ZāZEN Properties is seeing with its current project, ZāZEN Gardens in Al Furjan. As the first and only LEED-Gold residential development in Dubai, 95% of units have already been sold since sales launched and only 10 available units remain. ZāZEN Gardens will be a key contributor to achieving the UAE’s environmental objectives as approximately 470 metric tonnes of CO2 will be reduced annually upon the building’s scheduled handover in April 2024. Residents of the community will enjoy modern, spacious units that are complemented by premium amenities and Well-Being integration such as Feng Shui. Similarly, ZāZEN Gardens’ convenient location near the Gardens Metro Station and the UAE’s upward real estate trajectory will enable investors to see a strong ROI.