Buying an off-plan property in Dubai? Read this...
By the end of 2018, Dubai’s real estate property market is expecting a development influx of 48,000 new villas and apartments. According to the data revealed by CBRE Dubai MarketView Report Q2-2016, these statistics are opening up many new avenues of investment in Dubai’s off-plan properties. In a bid to attract investors, developers are offering lucrative payment plans on off-plan properties, including post-handover instalments, at highly competitive prices. Dubai’s real estate property prices are low, and off-plan prices, lower –making now an opportune time to plan your investments. We’ve created this handy guide to tell you all you need to know about off-plan investments in Dubai:
Deal with a reputable developer
It’s crucial to know whom you’re buying from. A quick Google search of your prospective developers can reveal past projects, standards and track records, indicative of future undertakings. Look for developers with a compelling portfolio. For example, DAMAC Properties has a number of world-class properties like AKOYA Oxygen, DAMAC Maison Privé, AYKON City and more, so you can keep your eyes peeled for their up-coming plans. Big or small, choose a credible developer who gives you the confidence to invest in a promising off-plan property.
Know the project/development
Like any good relationship, you’ve got to take the time and get to know the project to see if it’s right for you. Consider factors such as:
- Location of the development
- Neighbourhood and its qualities
- Surrounding infrastructure
- Facilities and amenities
- Development master plan
- Location of the specific unit you’re looking at
- Size, number of rooms, floors, units, towers
- Parking options
- Security measures
Thanks to mock-up apartment models and thorough development plans created by developers, you can get a good idea of what you’re in for.
Seek professional guidance
A little help from experienced real estate brokers can go a long way in making a successful purchase. Local professionals with a keen understanding of the market dynamics and prior dealings with developers in the region can point you in the right direction.
Read the contract carefully
Considering an off-plan property essentially exists on paper, you simply cannot overlook the paperwork. With the support of a knowledgeable real estate agent, conduct a meticulous inspection of the contract and all related documents, so you know exactly what you’re in for.
Understand the payment plans
When it comes to off-plan properties, it’s all about the payment plan. Better the plan, higher the premium. Dubai’s real estate industry is known to take a customer-friendly approach with their payment plans, offering extremely favourable options. For instance, DAMAC Maison Privé offers luxury hotel apartments where you can pay 70% upon completion. It’s easy to see why Dubai has become an investment hotspot with reasonable options like these on the table.
Off-plan properties hold immense potential in terms of long-term capital appreciation and returns. Before investing, consider your liquidity position to ensure you can make timely payments, and take resale value predictions into account to determine the worth of your property. The maturing market is a safe haven for investors to expect significantly higher gains in the future, compared to what you’ve paid for today.
Rules and regulations to know
Understanding rules, regulations and milestones becomes especially important when you’re purchasing off-plan property. Here are a few things to keep in mind:
- Purchase property in a Dubai Land Department approved and registered development project
- Payment of DLD registration fees of 4% of the purchase price at the time of purchase
- Make sure the Sale Purchase Agreement is signed and stamped by the developer
- Until completion, you have to register the property on the Interim Property Register (Oqood)
- Once registered, the title deed will be issued, laying down the particulars of the purchased property and the sale transaction
- Make payments into an Escrow account in the name of the project