Discussion on off plan properties in Dubai

Discussion on off plan properties in Dubai

How is the demand for off-plan properties in the market?

Emaar rejuvenated the off plan market in 2013 and many developers have now followed suit. However in more recent times we feel better scrutiny in the research and consumer demands has been evident with Developers offering unique projects including more affordable housing and improved payment plans. The competitiveness in the market to produce a better product is very encouraging for present Buyers entering the market at this time. Entry purchase prices are also reflected in approximately 20- 30% less than completed properties.
 
Can you resell an off plan property before completion?

In most cases you can sell an off plan property before final construction however terms will apply. A certain amount of the purchase prices may need to have been paid before transfer of ownership.  A Title Deed is only produced on completion of a project and to change ownership without this Deed incurs higher Land Department fees of 8%. To strengthen the market and to reduce speculators it is encouraged to retain properties until completion and Developers offer incentives and priority buying to end users or long term investors.
 
 Is there more risk investing in off plan than ready to move in properties?

There is always a risk in buying any unseen product anywhere in the world and hence it is important to invest through a recognized and reputed developer known to deliver product.  While the Dubai Government has taken measures to safe guard purchasers it is important for a purchaser to be aware of the content and implications of the Sales Contract issued by the developer so they are aware of the restrictions, allowances and penalties.  
 
What are the hidden costs involved in investing in off-plan properties that the buyer must review?

When buying off plan the payment schedule is clearly set out by the developer.  All buyers need to register their property and this cost 4% of purchase price. All Dubai properties whether off plan or completed must be registered with the Dubai Land Department. This charge should be payable with the first installment of the payment plan.
 
What are the policies to regulate Developers and developments to protect the interest for the buyer?

All developers now have escrow banking facilities which protects any buyer investing into an off plan project. Funds are paid to the Escrow project account and only released to the developer based on the progress of the construction and delivery milestones.  This prevents Developers using purchaser�s funds against other costs.
 
 How can investors protect their interest and investment when investing in off-plan?

It all comes down to conducting the right research. You should have thorough knowledge of the Developer and complete the relevant due diligence.  A registered Real Estate Agent offering off plan property should have completed this and should provide documentation to support the Developer is abiding by regulation requirements. You should be in a position to complete the payment terms in full even if your strategy is to sell before completion. Know the area, potential growth and rental returns so you have information to assess the strength of the investment fully.
 
 What types of buyers choose off-plan properties?

In many cases it is investors rather than end uses due to the wait during construction.  However you also find a lot of first time buyers who are wishing to enter the market and may not be able to afford the higher completed property prices. Off plan properties also present staged payment plans that avoid having to pay for a property 100% upfront.

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For more questions and answers on off plan property in Dubai look out for our future blogs but if you would like to review a related blog please click on link below:
 
 
http://www.exclusive-links.com/blog/purchasing-off-plan-properties/
 
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