As the demand for off-plan properties in Dubai goes full speed ahead, more agents are looking for ways to be a part of this thriving sector. To understand the market and its audiences, we spoke to a seasoned professional in this niche – Shahzaib Yousuf, Managing Director of Billionaire Homes Real Estate. In this edition of Industry Eye, Shahzaib shares various insights into Dubai’s off-plan sector and his predictions for the market ahead.
I am Shahzaib Yousuf, Managing Director of Billionaire Homes Real Estate. My journey in the real estate industry began in 2012, during a pivotal time when the market was recovering from the global recession. I quickly developed a deep passion for the industry inspired by the city’s growth and potential. Deep down, I knew I wanted to be a part of this dynamic transformation.
After years of experience in the field, I decided in 2021 to establish my own agency, focussing on a niche that truly excites me – off-plan properties.
What makes off-plan sales different from selling ready properties?
Working in off-plan sales has its own set of pros and cons. We primarily work with cash buyers and investors in this market, which requires an in-depth understanding of the current market trends and new projects. Agents need to stay ahead of the curve, guiding investors on where they can maximise their profits.
On the other hand, selling ready properties typically involves end users who often have their own understanding of the market. Their decision-making process is driven more by personal needs rather than pure investment potential, making each approach distinct.
Factors that make Dubai’s off-plan real estate market attractive
Dubai’s off-plan real estate market is incredibly appealing to both local and international investors for a multitude of reasons.
Foremost is the potential for lucrative profits; the market offers significant opportunities for capital appreciation. In addition, the ease of payment plans makes investing more accessible. The government’s new initiative to offer golden visas for property investments starting from AED 2M – even if purchased on a payment plan – has further heightened interest.
I have witnessed clients who made a 20% down payment on an AED 2M property and received their golden visas. This growing trend is evident, as many clients now inquire about the Golden Visa before discussing the properties themselves, underscoring the importance of that factor in the increasing allure of Dubai’s off-plan real estate market.
Do off-plan properties in Dubai offer strong rental yields and long-term capital appreciation?
Absolutely! The numbers speak for themselves. If you look at the upward trend of the market over the past four years or even across the last three cycles, off-plan properties consistently yield better rental returns. This is primarily because the entry price is typically lower than that of ready properties.
For example, properties that are being handed over this year, which were sold 3-4 years ago, are generating rental yields of up to 16 – 18%, in addition to the significant capital appreciation they’ve experienced.
For agents, the explanation is straightforward. Since banks generally do not provide mortgages for off-plan properties, the buyer pool is initially limited. However, once the property is completed and handed over, the buyer base expands significantly to include mortgage buyers and end users. These mortgage buyers tend to drive prices higher, ultimately benefiting investors who purchased off-plan.
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Common risks associated with off-plan property
In today’s market, with a constant influx of off-plan projects being launched, one of the biggest challenges for real estate agents is identifying projects that will yield profits for their investors. When investors see success, they are likely to continue their relationship with you long-term.
The most common risks associated with off-plan investments include delayed handovers and developers who overpromise and underdeliver. To mitigate these risks, it’s crucial to work only with reputable, top-tier developers. At Billionaire Homes, we exclusively partner with blue-chip developers, which helps safeguard our investors’ interests and ensures that they are more likely to see their projects delivered on time and as promised.
Client profiles that are drawn to off-plan properties
Off-plan properties attract a diverse range of clients from around the world. A significant demographic includes those seeking golden visas, particularly from the subcontinent. Additionally, many European millionaires are looking to escape high taxes and rising inflation. There are also individuals concerned about global unrest who are searching for a safe environment for their families.
In short, Dubai is appealing to a broad spectrum of investors and off-plan properties serve as an accessible and secure entry point. As an agent, it is essential to actively promote your services and demonstrate how you can assist these clients in navigating their investment opportunities.
Advice for agents transitioning to off-plan sales
For agents looking to transition into off-plan sales, my primary advice is to cultivate a deep understanding of market knowledge and trends, particularly since 2017. Off-plan sales encompass much more than just holding meetings and introducing clients to developer representatives. A sustainable off-plan model involves an in-depth ability to guide clients on critical questions: when to buy, what to buy, and how to compare price per square foot with ready properties.
Additionally, understanding rental yields in neighbouring areas and the buying/selling trends is essential. I often tell my team to ask themselves, “If I had this much money, would I buy this for myself?” If you believe in a project enough to invest your own money, it will be much easier to convince your clients to do the same.
Future of Dubai’s off-plan real estate market
Looking ahead, Dubai’s off-plan real estate market is poised for continued growth and innovation. Over the past two years, we’ve seen robust demand for off-plan properties, driven by a combination of favorable government policies, attractive financing options, and a strong influx of international investors. This trend is likely to persist as the city continues to enhance its infrastructure and quality of life, making it an even more desirable destination.
Additionally, numerous master communities are being developed in the southern regions of Dubai, especially following the announcement of the new airport. This expansion toward the south presents an excellent prospect for off-plan investments as the city grows and evolves. The emergence of these communities will likely attract significant interest from investors looking for promising opportunities.
As agents, stay informed about these trends and emerging areas, as they will shape the future landscape of Dubai’s off-plan real estate market.
About Shahzaib Yousuf
Shahzaib Yousuf is the Managing Director of Billionaire Homes, holding over ten years of experience in the Dubai real estate industry. He specialises in selling luxury upscale properties, having worked with high net-worth clients, investors and influential individuals throughout his career. He is adept at negotiating complex deals, leveraging his knowledge of the market to achieve optimal outcomes for his clients.
About Billionaire Homes
Billionaire Homes Real Estate has a strong portfolio of ground-breaking real estate developments in different emerging locations across Dubai. They pride themselves on providing elite living and working spaces in the city, walking their clients through their entire property journey.