Guide To Buying Off-Plan Property in Dubai

Buying Off-Plan Property in Dubai

Purchasing unfinished property when it is still in the planning or early phases of construction is known as buying off-plan property in Dubai. Typically, this is done directly through the developer or a licensed real estate broker. In this essay, we’ll go through the guidelines, dangers, and due diligence that should be taken into account while buying off the planned property in Dubai. when you purchase a home or apartment off-plan, you do it prior to construction, when just the plans are available. There are several benefits to buying a house off-plan, including a brand-new home, a price that is fixed, and a customised finish. You must also take into account the hazards, though, as with any significant investment.

What, though, is an off-plan property? It is merely a piece of property before anything is built there. Pre-constructions are typically advertised as developments to early adopters and real estate developers so that the buyer can obtain more benevolent financing terms from their lenders. this means that you might have to purchase the property while it is still in the design and planning stages, or you might be looking at a nearly finished project that is awaiting finishing touches. depending on what stage it’s at and what your goals are regarding the property — is it a residence for you or an equity investment — the risks and benefits can change.

Know The Risks of Purchasing an Off-Plan Property

Know the Risks of Purchasing an Off-Plan Property

Even though Dubai’s off-plan properties offer enticing rates and options, there are a few concerns to consider before making an investment in this segment of Dubai’s real estate market.

  • Project Cancellation or Postponement

Delays in handover and completion are among the major drawbacks of purchasing off-plan real estate in Dubai. One major hazard of purchasing off-the-plan real estate is that most of the time developments do not go as planned and that construction delays can occur. therefore, while purchasing off-plan real estate in Dubai, be sure that the purchase and sale agreements specify the project completion and what would happen if the developers are unable to reach the date of handover.

In some circumstances, buyers may even lose the money they have already paid if the project is cancelled or abandoned before completion. Therefore, it’s essential to do research about the developer and ensure that they are reputable and established before you decide to buy off-plan property in Dubai. RERA Dubai is the regulatory body of the Dubai Land Department or DLD, which has initiated some new rules to protect and help off-plan property investors. As per the new rule the developers need to deposit all payments made to them into an escrow account registered under the Government of Dubai. The amount will be only accessible only after the project reaches a particular stage in the process of completion. Make sure that the developer of the real estate project as well as the escrow account has been registered under DLD & RERA before you purchase an off-plan property in Dubai.

  • Changing Market Conditions

The volatility of the market conditions is a big risk which is associated with Dubai’s off-plan real estate. After you purchase an off-the-plan property, market prices may decline, making the property less valuable than you paid for it. Among the best advice for investing in off-the-plan real estate, one advice is to buy one in a market that indicates growth, so you may benefit from low prices while enjoying bigger returns after the house is finished due to its increasing market worth.

Verify the project’s location, connectivity to other areas of Dubai, and the quality of the services, local infrastructure, and tourist attractions.

  • Expectations of Quality Might Not Be the Same

Expectations of Quality Might Not Be the Same

When we talk about the property’s quality, it is equally critical to investigate the developer. Despite the fact that display houses and advertisements may seem to be quite enticing, the results may not meet your requirements or be to your taste. This is another way that purchasing off-the-plan real estate in Dubai is different from purchasing a ready home, where you may visit the flat in person. One danger of purchasing off the plan is this, but the risk can be reduced by knowing about the property developer and ensuring that they’ve maintained a solid track record.

  • Selling of Property Only After Paying Decided Percentage

Off-plan property owners could encounter limitations if they want to put up their apartments for sale before construction is finished. Today, before selling an off-the-plan property in Dubai, developers generally demand that the buyer pay a predetermined percentage of the property. When purchasing off-the-plan real estate, it is important to confirm the minimum amount with the builders at which you wish to sell the off-the-plan apartment. 

  • Zero Immediate Returns

A major drawback of acquiring a house off the plan is that owners will not start to profit from rental returns unless the building’s construction is finished, in contrast to those who wish to purchase ready properties. However, individuals who purchase Dubai’s off-plan real estate will pay less and can benefit from price increases after the project has been completed. Even if purchasing Dubai’s off-plan property has some hazards, buyers can minimise such risks by following basic safety procedures.

Why Should You Think About Buying Off-Plan Property In Dubai?

Why Should You Think About Buying Off-Plan Property In Dubai

Off-plan property acquisitions have grown in popularity in Dubai among both novice and seasoned investors for a number of reasons. When compared to buying a ready-to-move-in property, those purchasing off-plan real estate in Dubai will surely benefit because of the lower prices. Only the “locked-in” amount will be paid by the buyer, which will bring a great return if they decide to put up the property for sale, as the market prices keep fluctuating and may rise in the near future. 

In Dubai, there are also a tonne of alternatives for off-plan construction, led by leading builders like Dubai Properties and Emaar Properties. Investors can therefore choose from a number of Dubai’s brand-new off-plan properties that fit their preferences and needs. Off-plan properties may also present a profitable opportunity for both homebuyers and investors. It is all due to the guidelines and restrictions established by RERA to benefit buyers. 

Bottom line

Investors and homebuyers can purchase a house at a lower cost by purchasing it off-plan as opposed to waiting for the development of their preferred property to start or for it to be finished. Additionally, after the building begins or ends, the selection may be limited, making off-plan purchases the only method to acquire a property with a particular location or set of characteristics. off-the-plan property is often considered desirable if there is a high degree of infrastructure nearby, such as new hospitals, schools, or expressways that have already been completed or are scheduled for construction in the near future. if the market declines while you are buying an off the plan property, you also face the danger of overpaying for the house. There is a chance that the building quality or plan won’t match what you originally had in mind because many builders won’t let you see the project until it is finished. Therefore, be aware of all the risks indicated above.

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Frequently Asked Question (FAQs)

Can i get a mortgage to buy off-plan Properties?

An off-plan mortgage is required if you wish to own a property, however, you must sell it before the project is completed.

Can I be denied a mortgage after I have put down my deposit?

Yes, it is possible that you can be denied a mortgage after putting in a deposit.

Will I get compensation if the apartment is not delivered on time in the UAE?

Yes, you can claim compensation if the apartment is not delivered on time. However, the the amount you get as compensation completely depends on the authorities, once you have filed a case against your real estate developer.

How do i sell off-plan Property?

Depending on the SPA with the real estate developer, you can put up your off-plan property for sale once you've paid a set percentage of the property's value. Typically, it happens after you pay 30–40% of the property's value.

What if I’m not able to complete payments on an off-plan property?

In such circumstances, the developer gets a few rights that he can implement on you. He is liable to either disregard the contract of sale or cut a particular amount as compensation, depending on the stage of the construction.

Sargam Bhasin The S in her name stands for short, spirited, sweet and sports. She is someone with a scintillating personality. Strong at playing with words and even stronger while expressing them. As a firm believer in self-reliance she is a blend of sappy, saucy and whole lotta sassy.
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