Buying a house in Dubai is a dream of many. But, the high property prices often become a major hindrance in turning this dream into reality. Even though Dubai property prices still haven’t touched the peak 2014 levels as the market is staging a remarkable recovery, they are still too high for some people. This is where the option of buying off-plan property comes into the picture.
There has been strong growth in the primary (off-plan) market in Dubai. According to DLD, 17,081 transactions were made for off-plan properties in Dubai throughout the year 2021. The combined worth of these transactions amounted to AED 30.9 billion.
For the uninitiated, off-plan property is a type of property that’s in the development phase. Construction work for the said property may or may not have started. Since it will take for the property to complete and handover to take place, such properties usually cost less. Furthermore, developers also offer convenient payment plans, such as 10/90 or 5/95, to attract more buyers.
Tips to Buy Off-plan Property in Dubai for a Smooth, Hassle-free Process
While off-plan properties have surely made it easier for many to buy property in Dubai, there’s a lot to consider when you take this route. If you are not tactful and careful enough, you may end up in troubled waters. To ensure nothing of this sort happens to you, follow these effective tips:
- Understand the Prices
Many people, particularly first time buyers, focus on the asking price and payment plan only. They get impressed by the same and seal the deal. This is a mistake you need to avoid at any cost. Always know the per square foot price of the off-plan property before selecting it. This will help you get a better insight into whether the seemingly affordable property you’re buying is actually affordable.
If you’re not focusing on this aspect, you may end up buying the off-plan property for the same price as the ready property. So, be very tactful and make sure you understand what you are paying for. For example, know whether you’re paying for the internal area or the total area. If the property comes with a balcony/terrace, ensure its sqft price is less as compared to the sqft price of the internal area.
- Check the Legitimacy of the Project
This one’s very important. Always make sure to check and verify the legitimacy of the project before finalising it. Although only registered projects can be advertised, according to the new property advertising law, it is still important to verify the same by visiting the RERA portal. Other than that, do not make payment in any other account than the escrow account of the property. Doing this ensures your payment is safe even if the project gets shelved.
- Know About the Location
Location matters! It is going to impact your lifestyle (if you intend to live in the property after it is completed) and returns (if you intend to sell or rent it out). Either way, you should do your research on the location and know everything about it. Don’t just rely on what the developer tells you. Make sure to physically visit and inspect it.
If it’s a waterfront property that promises ample views of lakes or sea, enquire the developer about any projects slated to be launched in the immediate vicinity so that those ‘promised views’ wouldn’t be blocked or compromised later on.
Also, buy a property that’s located in an established area. Buying in non-established areas comes with a lower price tag, but it will take a long time to earn returns. Furthermore, take into account the upcoming developments around the site, such as upcoming parks, educational institutes, other developments, etc. You can find more about the best areas for off-plan properties here.
- Check the Developer’s Reputation
Not many pay attention to this fact, but it holds crucial importance. Get information about their previous projects and know how well they handled them. Was the handover completed on time? Did the property have all the promised amenities and facilities? What is the current market value of those projects? Knowing answers to these questions will help you make an informed decision.
- Hire a Real Estate Agent
This may come across as a surprise to you since many recommend directly buying an off-plan property from developers. However, hiring a real estate agent or relying on a property portal can actually prove to be beneficial for you.
Firstly, directly contacting a developer limits your horizon. A developer will certainly not tell you about other promising projects that can cater to your interest, but an agent will. Similarly, experienced agents have vast market knowledge. They can anticipate price shifts and upcoming trends. Therefore, they can guide you better when it comes to the selection of the off-plan property.
You are ultimately going to need the services of an agent post-handover when you will be selling your property or renting it out. Therefore, engaging them in advance won’t hurt. Having said that, only rely on experienced and professional agents who have expertise in dealing with off-plan properties.
- Scrutinise the Project
Just like the developer, you need to find out every detail about the residential project you have selected for your off-plan property. If you’re considering buying an apartment, prefer a cluster of buildings instead of a single building. The reason for this recommendation is that the former comes with an advanced set of amenities that attract more buyers. This increases your chances of earning a high ROI.
Speaking of amenities, you should know beforehand what your property comes with. Bear in mind that not every residential development in Dubai features a gym, swimming pool, play areas, etc. Since the availability of these amenities greatly impacts the ROI, you need to know which ones are included.
- Know about the Property
Scrutinise the livability, saleability, and rentability of the property. If it comes with a balcony, ensure it is adequately sized. Consider the layout as well. Know how many bedrooms and bathrooms are going to be on the property. A better approach is to invest in a project which has a show property. This will give you a better understanding of the finishing and other details. However, be mindful that you won’t get the exact unit as the show property. But, knowing about all this in advance can prove to be highly beneficial and save you from unanticipated ‘surprises’ in the later stages.
For better understanding, get the approved site plan from DLD. This way, you will get to know about the exact view, direction, dimension, position and total size breakdown of the property. In case the property doesn’t match the proposed layout or dimension, you are well within your rights to refuse to take the property handover.
- Discuss Payment Plan in Detail
Before finalising your off-plan property, discuss the payment plan in detail. Know about the payment terms and what will happen if you fail to pay your instalment on time due to any unforeseen circumstances. Ask about the exit plan as well.
Always keep in mind that the higher the post-handover plan is, the better for you. In simple words, a higher post-handover payment plan means a safer investment. Also, it’s better to invest in a project that comes with a progress-based plan. For example, in such a plan, instalments are paid on the basis of construction progress.
- Read the Contract Thoroughly
Lastly, read the contract thoroughly. Ask for assistance if you do understand a particular term. Make sure there are no hidden terms and clauses that may restrict your ability to sell the unit before its completed. Also, know about service charges and other costs associated with the project which are mentioned in the agreement.
In all, buying an off-plan property can prove to be quite beneficial for you. It can prove to be a stepping stone to venture into the ever-growing Dubai property market. So, do your due diligence and follow all the aforementioned tips to ensure you have made a safe investment.