Dubai is now among the world’s most affluent and rapidly expanding metropolises. It has transformed from an oil-based economy into a dynamic commercial center that seeks to capitalize on the country’s strategic location and multicultural workforce.
Because of this, the city is now recognized as a major center for international trade. Dubai is a great place to do business, but vacationers of all stripes will find much to enjoy in the city.
The city’s adaptability and variety of investment prospects in the real estate market, notably in off-plan property, have lured in foreign investors in recent years. But why should you consider buying a property in Dubai before it is completed?
Off-Plan Properties in Dubai Are More Affordable Than Ready-Built
Buying a property before it is fully built means you can save money, which is one of the most obvious advantages. Also, the price of the property you buy before construction has even begun will increase significantly by the time it is completed and put into use. Developers in Dubai aim high, so their finished projects often end up being veritable treasure troves.
Is It Worth It to Buy Before Construction Is Complete?
Delays in the project’s completion are a regular danger. You can never know for sure if an investment you make will be finished on time. Because of this, it is crucial that you investigate the developer of the property you are thinking about purchasing.
Before making a purchase, you may want to research the company’s performance history and make sure any sale agreement offers compensation in case of such delays.
Alterations in market conditions are another common threat. If real estate market dynamics are trending downward, the value of an off-plan acquisition may go below the purchase price. Although this is equally related to completed homes, off-plan residences are more vulnerable because they may be more difficult to sell.
What costs and fees are associated with off-plan purchases?
In Dubai, there are both pre-built estates and off-plan properties available for purchase.
Included in the list of must-pay costs for the buyer are:
- Payment to the Dubai Land Department of 4% of the property’s purchase price;
- Payment to the Dubai Land Department of AED 3,000 for Oqood Registration.
Is It Possible to Guarantee Completion of the Project?
It’s essential that off-the-drawing-board projects be finished on time. As a result, RERA has implemented a number of rules that must be followed by all construction firms. For example, the developer has to own 100% of the land where the project is being built. The developer also must finish 20% construction, deposit 20% in an escrow account, or make a down payment of 20% as a bank guarantee. In addition to the aforementioned, RERA mandates that developers provide a performance guarantee of 10%.
Only using DLD-approved institutions to make payments for off-plan purchases will provide extra security against fraud, delays, and cancellations. Developer access to your deposit is contingent on meeting certain completion criteria, as determined by an independent expert.
When Can You Resell Off-plan Real Estate in Dubai?
The Dubai real estate market of today is a safe and sound one. Several stringent regulations have allowed us to accomplish this. One of them affects those who purchase off-plan properties and then try to resell them before they are finished being built. The leading Dubai builder, Emaar Properties, requires a minimum 40% down payment on off-plan properties before consumers may resell them. The amount may change based on the architect.
Thus, once this sum is paid, the owner can sell the off-plan property, which is essentially similar to selling a completed home. After settling on a price and terms, the buyer and seller sign a contract, the buyer applies for a no objection certificate (NOC) from the developer, and the new owner begins making payments to the developer. It’s also worth noting that even if the original purchaser paid the 4% DLD Transfer Fee, the new purchaser is still responsible for paying it.
Conclusion
There are several potential benefits to the buyer, despite the fact that purchasing off-plan real estate in Dubai is a risky endeavor. Consumers who act responsibly, adhere to applicable laws, and use common sense can avoid numerous potential problems. The least you can expect from purchasing a house before it is completed is significant cost savings. You can make a return on your off-plan investment if you carefully monitor the market and prepare accordingly.
