Dubai property market is no less than a magnet for investors. From lavish waterfront homes to luxury apartments, an individual with sufficient funds has a lot of options at their disposal. Moreover, the option of investing in off-plan projects (newly launched or under-construction properties) further makes it easy for investors to add another property to their inventory without breaking the bank.
However, there are some drawbacks associated with these properties as well. In this post, we have discussed both sides of buying off-plan properties. Going through this guide will help you make an informed decision.
Easy Entry to the Property Market
Off-plan projects allow investors an easy way to venture into the Dubai property market. Ready properties are expensive; thus, they need a higher amount of capital. This is why investors have to think twice before investing in them. Furthermore, developers tend to be more flexible in terms of off-plan projects, vis-à-vis the payment plan. They try to make it as flexible as they can to attract more buyers.
Buyers only have to pay a fraction of the total amount upfront. The rest of the cost of the property is paid in different instalments.
As compared to ready properties, off-plan residential units are rather inexpensive. This is due to the sole factor that they aren’t completed yet. Ready properties, on the other hand, are fully constructed and the buyer doesn’t have to wait a lot before they can move in. The wait, in the case of off-plan projects, can be very prolonged, depending on the phase in which the project is.
Minimum Risk of Suffering a Loss
With off-plan properties, there’s a minimum risk of suffering a loss, provided the project is owned and backed by a reputable development firm. And, of course, the market conditions do not change.
Even if a project gets cancelled, there will be no monetary loss for the buyer. They would get compensated for their funds through the escrow account of the project. However, they need to file a petition for a refund, and it is mandatory for them to show proof(s) of owning the property.
Can Be Sold Before Completion
A remarkable feature of buying an off-plan property is that you can sell it at higher rates before it is completed. However, for this to happen, the project must be in a prime location. Furthermore, it should be marketed properly. For example, Stella Maris in Dubai Marina is one such project that can help you reap beneficial results even before its completion.
The biggest drawback of off-site projects is unexpected delays. Natural calamity, poor economic conditions, or sheer incompetence of the development firm could lead to unexpected and prolonged delays. However, in Dubai, it rarely happens as RERA governs these projects. Development firms that show signs of incompetence are at the risk of their projects getting cancelled.
Not Suitable for Those Who Want to Move Immediately
If you are looking for a home to move in immediately, ready-to-move-in property is more suitable for you, not an off-plan one. As stated above, off-plan projects can take time to complete. The developers usually give an estimated date of completion at the time of the launch. However, several factors come into play that can lead to delay. This factor makes it inapt for those wanting to move into their new home at their earliest.
Change in Market Conditions
Market conditions, in Dubai, usually tend to stay on the stable side. Therefore, this isn’t exactly a drawback. However, no one expected the decline that was initiated by COVID-19. Therefore, conditions like these can change market conditions, which can have an impact on the prices of the property.
Having said that, if the project is located in a prominent location, it won’t suffer a massive dip in prices. But, you must take this factor into consideration before making an investment in the primary market.
A Final Word
To sum it up, buying an off-plan property has a lot of perks, certainly more than the cons associated with it. However, you must seek the help of an expert when buying such a property. Moreover, the selection of the project matters the most as well. If you’re investing in projects like Stella Maris Dubai, you can expect to get fruitful returns. On the other hand, in case you have selected a residential development away from the city, it will take time before you could capitalise on your investment.