Ending 2022 on a record-breaking note, the Dubai property market is witnessing a never-seen boost. Every sector of the market is experiencing growth, and the primary market (off-plan properties) is no exception.

For the uninitiated, an off-plan property is an unconstructed or under-construction property purchased directly from a developer or some cases, a first owner. Now, buying a property that has not been built yet may seem like a risky affair, but it doesn’t have to be if you do your homework.

Let’s begin by weighing the pros and cons of buying off-plan property in Dubai:

Pros and Cons of Buying Off-plan Property in Dubai

Advantages of off-plan Properties

Considerable Savings

Off-plan property is the earliest time to buy a property and hence the cheapest. As the project is still in the development phase, developers are keen to attract buyers and investors; thus, they lower prices.

Also, the market in Dubai is competitive as it is attracting foreign investors and HNWIs. Thus, developers, in order to entice them, offer lucrative payment plans with reduced down payments and instalments.

Off-plan properties also give the buyer more choices on the available options, allowing them to maximise their return on their investments.

Selling Before Completion

Investors can often sell their off-plan property prior to project completion. As long as the project is proceeding as planned and the market is stable, you can expect a hefty profit from this.

Having said that, how much you earn also depends on the project’s location, available facilities, types of property, and various other factors.  

Lower Up-front Cost

While payment plans for off-plan property vary from developer to developer, the down payment is generally lower compared to ready properties. This has made buying a property in Dubai easier for everyone. You can make a small portion of the actual cost (it can be as low as 5 per cent) as a down payment, and the rest is to be paid in instalments.

Convenient Payment Plan

Not everyone can buy property in Dubai due to the rising prices. However, off-plan properties offer an easy way out. We have already discussed the benefit of making a lower down payment. So, here, we will be focusing on the overall payment plan.

Typically, the payment plan of off-plan properties spans many years; it can be 3, 5, or even 7, varying from developer to developer. Buyers are required to pay regular instalments, usually once a month or quarter.

Disadvantages of Off-plan properties

Uncertain Completion Time

Often, real estate projects run beyond their completion dates, sometimes by weeks and sometimes even longer. So, always plan for such possibilities and be prepared so that you are not caught off guard.

For example, you may have to extend the lease on your current apartment if you are planning on living in the new property. It is also for this reason that researching the project developer’s track record is extremely important.

Changing Market Conditions

A downward move in property prices can result in the property being worth less than what the buyer has paid. This risk is not limited to off-plan properties but can impact them more as they may be harder to liquidate than ready properties. However, since the property market in Dubai is booming, this can be a very rare occurrence.

What is the Process of Buying Off-plan Property in Dubai?

Now that you have known and understood the pros and cons of buying off-plan property in Dubai, let’s proceed further to the process of owning one.

The process starts with sorting through listings of off-plan properties in Dubai. You can find them at Zoom Property, the most advanced property portal in the UAE.

Once you have zeroed in on some listings, do your homework on them. Are they close to amenities such as groceries, schools and hospitals? What about your workplace? How reliable is the developer? Also, ensure the project is registered with DLD.

After deciding on the property, contact the developer. They will need your passport copy, Emirates ID and reservation form containing the terms and conditions of the deal.

There will also be a reservation or booking fee amounting to 5 to 15% of the total amount, which will be paid to draw up the Sales and Purchase Agreement (SPA) which will be signed by both parties.

It’s also important to keep in mind the additional acquisition fees. Aside from the actual price, buying off-property for sale in Dubai also comes with other charges in line with your property purchase, such as legal fees, developer fees and agent fees.

We hope that this in-depth guide on the pros and cons of buying off-plan property in Dubai will help you in making an informed decision.

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