5 Key Factors Influencing the Price of New Developments in Off-Plan Properties

Market Overview

3 months ago

The real estate market is vast, especially if one is interested in off-plan properties in Dubai. Therefore, the following are the crucial factors that may help the investors and the homebuyers in this volatile market to understand the factors that may affect the pricing of the property.

Here are five major factors which are crucial when it comes to the pricing of the off-plan properties, which could be useful for anyone who aims at making the right investment in this highly competitive market.

Top 5 Factors Influencing Prices of New Developments in Dubai

Location and Accessibility

It is the location of a new development that can be said to be the most important factor that determines the price of the development. In fast developing cities like Dubai, being close to business districts, shopping malls and beaches is likely to raise the price of a property. Off-plan properties in Dubai that are located near metro stations, highways and airports are priced higher than the others because of the convenience they present. Also, the reputation of the area, security, and the proximity of schools and hospitals are also crucial factors.

Developer Reputation and Track Record

The credibility and the previous experience of the developer plays a significant role in the pricing of off-plan properties. Many a time, the developers who have a good track record of delivering quality work within the stipulated timelines charge more. Emaar and Nakheel, amongst other developers in Dubai, which boasts one of the most glamorous and advanced real estate markets, have developed a brand that commands a premium in their new projects. It has been established that buyers are willing to spend a lot of money for off-plan properties in Dubai provided that they have confidence in the developer’s ability to deliver.

Design and Amenities

Off-plan apartments in such a city like Dubai attract high prices because it is known for luxury and advanced architecture. These are features such as a swimming pool, fitness center, garden among others; smart home technology and others that enhance the value of the development. Also, projects that have some form of exclusivity such as having private beach frontage, marina or having a view of the Burj Khalifa or the Palm Jumeirah can attract significant premiums.

Market Demand and Supply

The availability of properties in the market and the people’s desire to acquire them determine the property’s market value. In markets such as Dubai, where there is a high demand for luxury homes, the prices of new developments may go high. Other factors which can be seen as driving this demand include population, economics, and confidence of investors. On the other hand, if there are too many off-plan apartments in Dubai in the market, then there are price reductions as developers try to sell them. Monitoring the market trends and the upcoming projects can give an idea on whether the market is a demand market or a supply market and hence affect pricing strategies.

Economic and Political Climate

Economics and politics are the leading factors that define the real estate market. Some of the economic conditions that can influence property prices include; interest rates, inflation, and foreign exchange rates. Dubai’s political system stability and its business environment has over the years attracted investors across the globe and this has a positive impact with the prices of new developments in Dubai. Besides, favorable government policies that affect the real estate market such as the long-term visa for property investors and changes in the laws on foreign ownership can boost confidence and the price of the market.

Conclusion

The above are the reasons for pricing of new developments in Dubai. The other factors that affect the prices of the properties are the features of the properties, the market forces of demand and supply, the economic and political conditions and policies. If you're also planning to invest in off-plan properties in Dubai, FirstPoint Business Solutions is here to help. Our team of experts can provide exclusive insights, and investment opportunities in Dubai. Contact us today to learn more about our investment advisory services.