Dubai is successful in drawing in a large number of foreign investors and expatriates in addition to local buyers.
As the city continues to develop, investors are not only focused on completed developments but also on properties that are not yet built. It is unusual for a development to be fully sold before completion, but this is becoming increasingly common in the Dubai real estate market.
Purchasing real estate in Dubai before it is built can be advantageous for various reasons, and with the recent increase in prices, it may be a wise investment strategy.
Let’s learn more about under-construction properties or off-plan properties in Dubai and how investors across the globe are benefiting from off-plan property investments in 2023.
Off-Plan Properties Dubai
Off-plan property in the UAE, particularly in Dubai real estate market refers to a property that has been fully planned, registered with the Dubai Land Department, and has an escrow bank account. It is sold with a payment plan that may include payments made after the property is handed over to maximize return on investment.
These properties can be a villa, apartments, or townhouses and can be sold by either an investor in the secondary market or a property developer in the primary market, such as Zazen.
Off-plan properties can be purchased while they are still in the planning or construction stages. Many investors prefer buying off-plan projects due to the flexible payment plan and the potential for capital appreciation and high ROI after the property is handed over.
Advantages of buying off-plan property in Dubai:
There are many benefits of buying property in Dubai, but off-plan properties are currently in demand due to the exponential potential they hold for investors around the world.
- Economic: Investors can save money by purchasing an off-plan property as they can obtain the property at an early and lower price. Additionally, buyers can select the top-quality apartments in the development, increasing the likelihood of obtaining a high return on investment.
- Investors don’t have to wait for project completion: Investors can often resell their off-plan property contracts before the completion of a project, particularly if the market has performed well and the development is in high demand, allowing them to make a significant profit.
- Profitable costs: Off-plan properties have lower initial costs due to the flexibility of the payment plans offered by developers. Some developers only require a small down payment, such as 5%, with the remaining payments linked to the progress of construction, making the financial commitment required relatively low.
Check out Zazen Gardens, offering luxury apartments with innovative well-being designs. It is located close to the famous Elie Saab Townhouses. The off-plan property is estimated to be complete by April 2024.
Located in Al Furjan, it is considered one of the prime areas for purchasing properties in Dubai. The location is in high demand for luxurious properties and projects, as they are likely to become the best investments in Dubai, providing high returns on capital.
What guarantee do I have that my development will be completed?
To ensure the completion of off-plan projects, RERA has implemented several regulations that developers must comply with.
One of these regulations is that the developer must own 100% of the land for the project. In addition, the developer must either make a 20% down payment as a bank guarantee, deposit 20% in an escrow account, or complete 20% of the construction before selling off-plan properties.
Additionally, RERA requires contractors to provide a 10% performance guarantee.
Buyers need to conduct their research and investigate the developers they are considering purchasing from. This includes checking the developer’s track record and reputation.
Can I buy off-plan as a first-time home buyer in Dubai?
In contrast to many other countries, the Dubai real estate market is open to all. From first-time home buyers in Dubai to global investors located in different parts of the world, anyone can buy an off-plan property in Dubai.
When can I sell my off-plan property?
To maintain a stable and secure real estate market in Dubai, certain regulations have been implemented. One of these regulations affects buyers who intend to resell their off-plan property before completion.
Buyers and sellers agree on the price and terms, sign contracts, and apply for a NOC where the new buyer is registered with the developer and ultimately takes over all outstanding payments once the transfer is complete.
It is also worth noting that, contrary to popular belief, the new buyer is responsible for the 4% DLD Transfer Fee, regardless of whether it has already been paid by the first buyer.
Why Investors are choosing off-plan properties?
Based on current data, investors and buyers tend to prefer off-plan properties as they are considered more reliable and offer a variety of payment options compared to properties that are ready to move in.
According to recent statistics, the Dubai real estate market saw around 5,000 sales transactions worth AED 16.69 billion in January 2022, making it the strongest January on record in Dubai.
While completed projects accounted for 53% of all transactions, off-plan properties made up 47%. The success rate of ongoing projects in Dubai is therefore evident.
It is well-known that the real estate sector plays a crucial role in maintaining the growing economy in Dubai.
As with any investment, off-plan properties have both advantages and disadvantages. The goal of highlighting the potential benefits of investing in unfinished projects is to inform you of the potential advantages these properties offer.
Due to these benefits, it is expected that the demand for off-plan properties will continue to increase in the coming years, so it is wise to make a decision now.
Explore the new amenities and innovative plan details of Zazen Gardens, Al Furjan, Dubai.