Monday, March 27

Pros and cons of the off-plan real property in Dubai

The real property off plan in Dubai UAE is gaining more and more popularity. This is a profitable investment format that opens up wide opportunities for savings and profit. The largest emirate of the country is being actively built up, which is largely facilitated by the growth in demand for real property from the foreign investors. Projects are being designed by both private and public developers. Let’s consider why it is profitable to invest in housing under construction and if there are risks in purchase.

Features of overseas real property off-plan

Any buyer is primarily concerned about the transaction security issue. If the ready-made apartments are available for occupation or use immediately after purchase, then when investing in properties under construction, the owner has to wait until the house is commissioned. The state has foreseen possible risks, so the developer does not have the right to implement  project only on a paper.

It is required to own the land plot for development and deposit at least 20% of the construction budget into a closed account. The account will act as a banking guarantor of the plans fairness. Sales are permitted only when construction work is actively underway and at least one tenth of the total volume has been completed. In this case, the buyer does not pay the entire amount at once, which is also a guarantee of investment security.

Payment for the apartment is carried out in accordance with the plan established by the contract, which directly depends on the completion of certain construction phases. Detailed information about the features of transactions with the properties off-plan can be obtained from the source

Why is it profitable to invest in off-plan apartments in Dubai

Last year showed an active demand for all types of real property in Dubai, which led to an increase in prices for apartments, villas. An increasing number of foreigners are considering the housing stock of the emirate not only as an option for movement to a permanent residence, but also as an investment. At the same time, the off-plan projects have a number of significant advantages compared to ready-made housing:

  • Savings of a few score of percent. The closer the purchase is to the start of sales, the better the price. The price of the apartment automatically increases by the time the house is commissioned.
  • Convenient payment system. With a scarcity of funds, the purchase of ready-made housing is possible only through the mortgage lending. Off-plan projects not only provide for phased implementation of payments, but can also be associated with their installment plan. A number of developers offer a similar service to buyers, whose benefit lies in the absence of commission payments.

Capitalization of value allows you to profit from the property resale. It is possible to do this at any time, without waiting for the completion of construction. 

What should be considered when buying real property off-plan 

The whole process is carefully controlled by the state. However, the buyer is advised to take a closer look at the reputation of the developer. Most often, it is the most reliable among the large state-owned developers. This allows you to reduce the risk of failure to meet time constraints.

But even in this case, the buyer is insured against financial losses. If the developer cannot complete the construction, then another developer comes to replace him or the buyer receives funds from the blocked escrow account back. Therefore, the only disadvantage of housing under construction can be called only one – the need to wait for commissioning.

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