Secondary real estate market of the UAE

The current state of Dubai’s primary real estate market

Dubai’s real estate market is booming, as evidenced by record reports for 2022. According to experts, the past year was the best in terms of the dynamics of growth in the cost and volume of housing sales for the entire existence of the market.

In 2022, real estate transactions worth about $70 billion were concluded in Dubai, which roughly corresponds to the total amount for 2019-2021. As for the number of transactions, the figures are almost 60% higher compared to 2021.

Demand for ready-made apartments in Dubai has been steadily growing. By the end of 2022, the secondary market accounted for more than half of the total volume of real estate transactions.

The dynamics of prices for the year amounted to 16-19%. Among the factors influencing the price increase, we can highlight the stable banking sector of the UAE, flexible investment policy, growing demand for housing and increasing popularity of Dubai as a tourist destination.

What influences the change in demand for Dubai real estate:

• Mortgage terms. An increase in mortgage lending rates in 2023 may reduce the demand for more affordable housing.
• Increase in the cost of construction. That is another factor that can negatively affect the demand for inexpensive real estate, so this year developers are likely to refrain from increasing the cost per square meter.
• Dynamics of construction of new facilities. Dubai’s master plan does not provide for active development in the future, which may provoke an increase in demand due to a shortage of proposals.
• Economic growth. Dubai is constantly developing and is a business and economic center, which also has a positive effect on the demand for real estate.
• Tourism sector. More than 15 million tourists visit Dubai every year, which also contributes to the growth of demand for the purchase of housing for rent.

Another factor of high demand is a good return on investment — about 10% per annum. Housing in Dubai is bought not only for personal use but also for the profitable investment of funds.

Disadvantages and risks when buying secondary real estate

Buying secondary real estate has not only advantages. The purchase of housing on the secondary market may have disadvantages and carry with it some risks:

• the purchase of the object is carried out at the market price — it is impossible to get benefits or discounts here, as in the case of the developer;
• there is no flexibility of payment — you will have to pay the full amount immediately;
• there is a risk that the condition of the apartment or villa will be imperfect compared to the housing that is just being put into operation.

How to buy a house in the primary market of Dubai?

To purchase an object on the secondary real estate market, you first need to find a suitable apartment or villa. It is important to choose property depending on the purpose of acquisition — for investment or personal use. You can find great deals with the help of Mayak Real Estate experts. There are objects in the agency’s database that are not publicly available.

Secondary housing is a property that has already been put into operation, so the parties need to formalize two contracts: a preliminary contract and a memorandum of understanding. Then the entire cost of the transaction is paid — the buyer receives a certificate of ownership and becomes the rightful owner of the purchased object.

Buying a home in Dubai has its own characteristics. It is best to go through all the stages under the guidance of an experienced agent. In addition to the selection of options, Mayak Real Estate specialists will provide full legal and accounting support for the transaction, as well as, if necessary, organize turnkey repairs with the involvement of leading designers.

Contact an employee of Mayak Real Estate to choose one of the best offers from the agency’s database and invest in the secondary real estate market of Dubai safely and profitably.