Buying off plan property in Dubai, with so many housing communities there nestling luxury residential developments, property buyers, and real estate investors have multiple options at their disposal.
The emirate, famous for its skyscrapers, tourist spots, and attractions, is also a preferred choice for foreign investors.
They can either choose from ready-to-move-in or off-plan properties. The latter has seen immense growth in terms of popularity in recent times.
After the 2nd quarter of the year 2020, 3,264 and 3,236 transactions valuing 4.50 billion and 4.33 billion were made in the primary (off plan property) market in Dubai, respectively.
Despite their rising popularity, some people, particularly first-time investors, are reluctant to invest in the primary market.
For helping them out in making an informed decision for buying off plan property in Dubai, we have come up with a comprehensive guide that sheds light on the pros and cons of investing in off-plan projects. Continue reading to know more!
Pros and Cons of buying off plan property in Dubai
Pros of Investing in Off-Plan Properties
For most people, a waterfront property in Dubai is out of range as it requires huge capital. However, if the project is off-plan, it can become relatively more comfortable to buy one.
The reason is that off-plan projects in Dubai are comparatively inexpensive, solely because they aren’t entirely complete yet.
The payment plan, although it varies from developer to developer, is also convenient. And the best part, the upfront cost is lower.
Therefore, the buyer doesn’t have to invest a lot of money to reserve a property under their name.
A Wide Variety of Options
Those with a limited budget only have fewer options at their disposal when it comes to ready properties.
However, if one plans to invest in an off-plan project, they can choose from a wide range of options.
As the rates are comparatively lower, it becomes easy for them to buy a penthouse, townhouse, or even a villa.
Selling Before Completion
That is one of the biggest pros associated with off-plan projects for investors. They do not have to wait for the project to be entirely constructed before they can sell it.
Suppose the project is positioned in a prime location, and the developers are doing the marketing right.
In that case, there are high chances that you can sell your property at reasonable rates before its completion.
Minimum Risk of Loss
Another remarkable feature of off-plan properties is that there is a minimum risk of loss, unless or until there is a fluctuation in the market conditions, which is quite rare.
Even if the project gets canceled, the buyer/investor wouldn’t have to face losses.
By showing their proof of ownership/investment in the project, they can file for a petition with the DLD.
After the approval of their petition, they will be compensated for their invested amount.
Cons of Investing in Off-Plan Properties
The most crucial risk of investing in an off-plan property is that it is prone to suffer unexpected delays.
These delays can be quite frustrating for those who had purchased the property intending to settle in it.
While there’s nothing much, you can do to avoid these delays as an investor or buyer. Furthermore, it is essential to do your homework on the developer’s reputation before investing.
Enquire about the other projects they have helmed and check if they were completed in time or not. If not, what was the reason for the delay, and how they tackled it?
Getting this information will help you make an informed and thoughtful decision.
Changing Market Conditions
It is the most significant risk associated with making an off-plan investment.
If there is a dip in the market, property prices will go down. As a result, it will be obviously challenging for you to sell your property at higher rates.
The only option you’ll be left with shall be to wait for the prices to see a spike again so that your investment can generate ROI.
In a bustling market like Dubai, it is a rare occurrence. Still, it is crucial to consider various factors such as the property’s location, amenities available for residents, nearby facilities, etc., before investing.
A Final Word
To sum it up, investing in the primary market is undoubtedly a wise decision, even for new entrants in the Dubai real estate sector.
With plenty of newly launched projects in popular communities, including the Stella Maris Tower in Dubai Marina.
This will be the last waterfront project in the area, the chances of generating ROI on off-plan properties are high.
And since the pros outweigh the cons, it is a better idea to invest in the primary market. However, take the plunge only when you have done your research.
When it comes to the real estate agent, be it primary or secondary market, a haste decision can land you in troubled waters.