The secondary market has performed well in 2020, thanks to smaller down payments and lowering cost. According to the Dubai Department of Land Resources, nearly 63 percent of the 8,675 real estate transactions in the third quarter were in the secondary market, up 21.7 percent from the second quarter.
Furthermore, because residential real estate values have dropped dramatically. There are good deals on the secondary market. Prices for residential real estate in Dubai have declined by 11.7 percent in the last 12 months, according to the Cavendish Maxwell report on the UAE real estate market for the third quarter of 2020.
Another advantage of a finished property from the standpoint of an investment is the immediate income. You can instantly rent or live in a property you purchase on the secondary market. You’ll have to wait one or two years to realize any return if you’re in the construction-in-progress industry.
Although the profitability of residential real estate in Dubai has rapidly fallen, an apartment can still provide a gross yield of more than 6.5 percent to an investor. In comparison to other major worldwide residential real estate markets, this is a rather high figure. Flexible payment options and a low-down payment are two of the standout aspects of the ready-made real estate industry.
There are normally no reductions available for post-transfer payment plans. The developer’s financial charges are included in the apartment prices. As a result, the developer transforms into a bank, offering real estate at their own risk. This does not, however, imply that the price will be less than in a bank.
The developer normally expects an 18% to 20% return on investment, with the profit spread out over a longer period of time. As a result, its pricing will never be as cheap as banks’.
The developer provides financial flexibility in the sense that you are not restricted to the bank that provides your mortgage. Many buyers, particularly those who want to buy their second or third apartment, will benefit from this flexibility. It’s also a realistic choice for self-employed people or first-time purchasers who don’t qualify for a mortgage, as well as those who plan to leave the country in a few years and don’t want to be obligated financially.
The developers, on the other hand, aimed to avoid launching new projects in 2021. They wanted to sell projects that had recently been completed. The Elan community in Majid Al Futtaim’s Tilal Al Ghaf was one of the few new developments to open this year, and it sold out in days. In 2022, the number of finished projects is predicted to rise. Building work has halted but will resume. Developers and investors will be able to benefit greatly from Expo 2020 Dubai.