Have you ever purchased a property even before its construction was complete? Such types of properties are called off-plan because they are available for purchase even before completion. In Dubai, you can purchase unconstructed structures directly from the owner or developer.
It is interesting to know that investment opportunities in under-construction buildings have witnessed a sharp increase in recent years in Dubai. One reason behind that is the competitive prices of such properties, which, for instance, is 18,785 AED in Dubai compared to 37,571 AED in Paris.
Investing in off plan properties Dubai is a profitable venture, provided you know where to look and consider the various factors influencing its rate of investment (ROI). However, even if you buy one for personal reasons, it will benefit you because of reasons like low prices.
But rather than purchasing an under-construction building on your own, you should hire a property consultant who will find a good location, ensure it has the necessary amenities, and carry out the negotiations with the builders.
These are some questions related to this topic that you will find helpful.
Why Are They Profitable?
Most properties under construction are available at discounts, with their demand value growing constantly. However, as a buyer, you would pay only the current price of the building, and sell them later when you want, thus profiting from the outstanding returns.
Because of the vast potential for profitable returns, the off-plan transactions in Dubai will be more than 5,24 billion in 2022.
In Which Ways Are the Buyers Secured?
You might be worried about the risks involved in buying an apartment under construction, which is justifiable. But thankfully, Dubai has laws that place certain obligations on the builders to fulfill their promises to the buyers before signing the sale contract.
For instance, according to Article 11 of Law number 19, the builder must build units on the land he owns and transfer their ownership to buyers in accordance with previously agreed upon specifications, schedules, terms, and conditions.
The law also obliges the developer to share the layout, construction plans, and design to let the buyer form an idea about the project beforehand. They must also make a downpayment of 20% as a bank guarantee or deposit the same percentage of money in an escrow account. Or, the builders could also complete 20% of the project before selling it to buyers.
What Are Some Preferable Locations for Buying Properties?
Some places in Dubai where you might consider investing are Downtown Dubai, Jumeirah Village Circle, Dubailand, Dubai South, Business Bay, MBR City, and Arabian Ranches.
Each of these locations is spectacular in its way. For example, Downtown Dubai boasts an excellent public transport system, magnificent landmarks like the Burj Khalifa, stylish promenades, easy accessibility to schools and hospitals, and even pet-friendly parks (if you have a furry friend).
Before buying, however, you must know your preferences. Some people enjoy living in homes with magnificent views, and projects close to Burj Khalifa would be ideal. If you are a beach lover, projects at Emaar Beachfront are an excellent choice.
However, if you are after luxurious apartments and duplex penthouses, look no further than The Bay, which sets the benchmark in luxury living.
What Are the Payment Plans for Such Projects?
Developers offer a variety of payment plans for projects that are still under construction, and you should have a clear understanding of those before making a payment.
Most builders initially demand between 20% to 80% of the total project’s value, with a fixed period to pay the remaining amount. You might consider asking your broker to look for a builder with a payment plan of 50-50, where you spend half initially and the rest upon assuming ownership of the property.
Are Mortgages Available on These Projects?
Yes, you can apply for mortgages for uncompleted projects, but only after fulfilling the standard terms and conditions. The loan-to-value ratio for nationals and foreigners in Dubai is 50%, but only after you have paid 50% of the property’s appraised value.
Banks usually approve mortgages for properties built by master developers (involved in constructing massive planned units).
If you are a UAE national, it qualifies you to obtain financing for 75% of the total project’s value. The best way to know about mortgages in Dubai is to hire a brokerage firm with mortgage advisors who know the best terms and conditions.
Investing in off-plan properties in Dubai is a good idea for several reasons like higher return on investment, safety regulations, excellent locations, superb amenities, and facilities. But, rather than contacting the builder directly, it is better to hire the services of a brokerage firm in Dubai who are familiar and well-researched with the market conditions.
