عربى

The value of buying off-plan

Following a recovery in the market in 2008-09 financial crisis, Dubai-based developers turned to touting off-plan projects – many of which are expected to be completed by
2021.

With the abundance of off-plan projects therefore available for home-owners to consider, there are questions around risk and return on investment that are common topics of conversation. While it might appear risky to purchase a property that has yet to be completed, experts maintain that the benefits often outweigh the risks.

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Low Price

The price of an off-plan property in Dubai is lower than a completed project. Every month, there is an abundance of ambitious projects announced at different parts of the city and due to the competition in the market, developers are competing on price by offering affordable and friendly payment plans.

Highly regulated market

The government of Dubai through the Real Estate Regulation Authority (RERA) and the Dubai Land Department (DLD) has implemented strict regulations that are meant to protect investors from losing their money if projects are not completed. Developers must completely own the land where the property is located, and payments made to the developer are protected under ESCROW held by the DLD. The developer is only allowed to use 5% of the money for marketing purposes while the rest of the funds are only allowed after it has been certified that the project has reached the required construction stage.

A wider range of projects to chose from

Across the UAE there are a wide number of projects that are offered off-plan which leaves potential homeowners and investors spoilt for choice when it comes to choosing their preferred area and price, whether it’s central city, or on the outskirts, apartments or villas.

Capital gains

The market value of most properties increases once they are completed so one of the biggest advantages of investing in off-plan properties is capital gains. Those that invest in off-plan properties enjoy a high return on investment (ROI) because of the increased value.

Buying an off-plan property has been thought to be a risky step for purchases especially during periods of weak or unstable economic environments. However, new deposit guarantees, stability and the solid reputation of the Dubai property market, have made buying off-plan property more popular throughout the years, where it has become a comfort and an ideal way to maximising an investor’s potential return on investment.