The secondary market has performed well due to falling prices and a reduction in advance payments in 2020. Of the 8,675 real estate transactions in the third quarter, almost 63% were in the secondary market, up 21.7 percent from the second quarter of this year, according to the Dubai Land Department.
Chris Hobden, Head of Strategic Consulting at Mena, Chestertons, says: “When you buy something ready-made rather than unfinished, you know exactly what you are getting in terms of the overall quality of the property and how it is equipped internally.”
In addition, prices for residential real estate have dropped significantly, so there are great deals on the secondary market. According to the Cavendish Maxwell Real Estate Market Report in the UAE for the third quarter of 2020, over the past 12 months, residential property prices in Dubai have fallen by 11.7%. Moreover, the UAE Central Bank increased the size of the mortgage loan for new buyers in March 2020, allowing foreigners to borrow up to 80% against the value of their real estate purchase, and UAE citizens up to 85% (an increase from 75 to 80%, respectively).
Another advantage of the finished property is the possibility of immediate income from an investment point of view. “If you buy properties in the secondary market, you can immediately rent it out or live in it. While in the construction-in-progress market, you’ll have to wait one or two years before you see any profit,” says Richard Wynd, managing director of the Better Homes real estate group.
Although the return on residential property in Dubai has declined at a fairly rapid pace, an investor can still get a gross return of over 6.5% per apartment, this being a relatively high figure compared to other major international residential real estate markets.
Now let’s talk about projects under construction. In fact, there are unique advantages to buying such real estate. “One of the great things about the off-the-shelf real estate market is flexible payment plans and a lower down payment,” explains Richard Wynd