Purchasing multiple off-plan apartments may seem like a form of risk diversification at first glance. However, in Dubai’s real estate market, this strategy often backfires. Due to oversupply, price inflation, and speculative behaviour from developers, this approach actually carries more risk than many investors realise.
The Problem with Off-Plan Apartments
In 2025, 73% of all real estate transactions in Dubai were off-plan deals. That equates to nearly 100,000 apartments sold, while population growth the year before was only 169,000 people. Furthermore, many of these new residents live in shared accommodation in older neighbourhoods such as Sharjah. Therefore, demand does not align with the enormous supply.
For developers, constructing apartments is faster and more profitable, leading to overproduction. As a result, many off-plan apartments today are priced at the same level as comparable ready-to-move-in units. But if you buy off-plan at the price of a ready property, you are essentially taking on unnecessary risk without the benefit of immediate rental income or occupancy.
A smart off-plan investment should be priced at least 30% below the value of a comparable ready property. If you cannot find such an opportunity, it is better to purchase an existing property with financing or keep your capital on the sidelines for the time being.
Villas and Townhouses: Scarcity Drives Returns
In contrast to apartments, villas in Dubai are scarce. In 2025, off-plan villas constituted only 23% of the market, with around 7,200 transactions. Even if only 30% of those are for owner-occupation, a maximum of 9,000 homes become available for rent or resale in a city of millions of residents.
With villas, discounts are still available compared to ready properties, and the end-user market is strong. This scarcity drives value. As Warren Buffett once said: “Diversification is protection against ignorance.” Those who know what they are doing do not need to spread their investments thinly.
Spreading Can Sometimes Increase Risk
Buying five average off-plan apartments might seem like a safe strategy, but in an oversupplied market, it has the opposite effect. You end up with units that are difficult to rent, show little capital appreciation, and are often delivered simultaneously, which increases competition.
One villa in a good location, purchased below market value, almost always yields better returns in Dubai than five average apartments. Scarcity, end-user demand, and limited new supply are the keys to a sound investment.
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