Dubai city has quickly become one of the most progressive and upscale cities in the world. It is almost unbelievable that at first, Dubai was a mere oil-based economy.
Currently, the Emirate is a thriving business hub that strives to take advantage of the country’s geographical address and versatility of the population.
Resultantly, the Emirate has gained a spot among the most iconic global commercial sectors. Even though the city is definitely a highly beneficial destination for business purposes, there is something for everyone.
An aspect that has earned the interest of international investors recently is diverse opportunities and flexibility in the real estate market, particularly investments in off-plan projects.
However, for someone who is unaware of this matter, it is natural to wonder what makes purchasing off-plan properties in Dubai so special.
Off-plan properties in The City Are More Budget-friendly As Compared To the Ready-to-move-in Ones
This fact is maybe one of the clearest perks of investing in off-plan properties – the ventures that are not yet finished are sold at a lesser cost. Not only this, but once the off-plan real estate you invest in is finally constructed and commissioned, it will cost much more than it did when you first purchased it.
Keeping in mind the standard of quality that developers are working hard to fulfil in the Emirate among the real estate projects, the last result looks like an actual treasure chest.
While investing in an off-plan property in the city, there is no need to worry about market fluctuations as you simply stick with the cost you pay for.
Therefore, if the real estate market expands in value, you won’t increase your payments, but the property you bought still goes up.
Off-plan Properties Purchase Guarantees Easy Payment Plans
The Emirate boasts numerous projects introduced each month. This puts the property developers in a cutthroat rivalry, where they strive to offer more beneficial costs and more simple payment plans.
Even though there are developers that tend to divide the payment into either two components (50% on completion and 50% as upfront payment), or extremely disperse it (for instance, 1% on a monthly basis), the majority of the companies strive to form multi-step procedures that suit their buyers and offer them a somewhat constant influx of funds.
For instance, District One (D1) in the Mohammed Bin Rashid City presents a 7-step payment plan, and Dubai Hills Estate also showcases a 7-step payment plan.
Potential investors are given a chance to sell their off-plan real estate contracts even before the venture is finished. In case the real estate market performs well and the venture becomes demanding among the public, you will gain a very handsome profit from selling it by getting the difference between the initial cost and the cost at the moment of sale.
Some Risks Linked To Purchasing Off-plan Properties
Among the most common risks of purchasing off-plan properties is a delayed completion time. There is no way to be completely sure that a residential venture you are investing in will be achieved right on the completion date.
Therefore, it is crucial to carry out some early research on the property developer of the residential venture you are interested in.
Surfing through the company’s track record and making sure that any scale agreement ensures compensation if any delay occurs is something you should most definitely do prior to settling the purchase.
Another common risk is the fluctuations in the real estate market conditions. Downward dynamics in the real estate costs can lead to the purchased off-plan property being worth less than the initial price.
Even though this is also related to ready-to-move-in units, off-plan real estate homes are more influenced, as it is difficult to liquidate them.
The Prices And Fees That Apply On Off-plan Properties Purchase
Purchasing off-plan properties in Dubai comes with specific fees along with readymade estate. The compulsory fees that must be paid by the buyer are:
- Oqood Registration for AED 3K, which is to be paid to the Dubai Land Department.
- Property Registration Fee for the 4% of the property cost, which is to be paid to the Dubai Land Department.
It is also important to remember that it’s not always the buyer who needs to pay, even if all the fees and charges are mandatory. A lot of property developers in this age pay 50% of the fees in order to facilitate their precious customers.
Moreover, some developers even pay the whole Dubai Land Department (DLD) registration fee themselves. If your property developer pays the fees and charges in full on your behalf, you will save a minimum of 4% on your charges.
How To Know Whether The Residential Venture Will Be Constructed
As previously mentioned, the completion of the off-plan projects is a vital point. Therefore, the Real Estate Regulatory Agency (RERA) has unveiled numerous measures that all property developers have to obey.
For instance, the developer needs to own the entire land where the venture will be constructed. Plus, he must finish 20% of the construction, make a down payment of 20% as a bank guarantee, or deposit 20% in an escrow account. Along with these conditions, RERA demands the developers submit a 10% performance guarantee.
Furthermore, to achieve extra protection from delays, fraud, and cancellations, buyers should pay for their off-plan properties at only DLD-approved banks.
Your particular developer can only access the funds you have deposited after hitting a specific stage of completion, which will be approved by a special consultant.
Although these measures appear to be useful and promote guarantee, it’s important for the buyers to dig deep into the companies they are considering purchasing a home from.
As stated above, surfing the company’s track record is very important, and you should also check its reputation in the market.
Even if purchasing off-plan properties in Dubai is a risky thing, it presents many opportunities for the clients. Conscious buyers can protect themselves from the risks by adhering to common sense and some regulations.
The least you will achieve is saving a lot of money. Plus, by doing the calculation and following the market, you can easily gain profit from your off-plan purchase.
We hope that this article was helpful and gave you valuable information. As there are tons of real estate ventures under construction, you will be spoiled for choice.
Whether you are interested in a studio or a spacious 4-bedroom property for your growing family, there is something for everyone. Townhouses, villas, duplexes, and apartments are all available.