Disadvantages
Price (Again) – Typically, when buying something that exists only on the developers brochures and lenders documents, you would expect it to be cheaper. This was the case in Dubai as well, but only until recently. Off-plan properties were usually priced around 20% less than existing homes. However, according to industry experts, this gap is narrowing down. Now, developers consider their off-plan or under construction homes with flexible payment plans just as attractive as ready homes, so they rarely offer bargains.
Risk – The biggest risk for many people in this type of deals remain the fact that they may never see their property completed. This usually happens when developers face financial troubles and put the projects on hold. Of course, there is also the risk of falling a victim to real estate fraud. However, if you review the S&P contract you are about to sign and get legal advice beforehand, you are relatively safe to go. In addition, government-backed and publicly traded large developers are considered reliable.
Reality
Property experts are warning that the increased sales of off-plan homes threaten to fuel another property bubble. The attractive payment plans offered by developers are favorable to speculators. Industry experts say also that the market is now in stable condition and it will remain very active to investors in the coming years.
Dubai is enjoying strong economic growth and the population of expat workers is increasing. Overall, most of the economic predictions are positive, so buying a home in UAE, especially off-plan may turn out a lucrative investment opportunity.
Dubai, in particular, is a popular travel destination with a well-developed business environment and infrastructure. Buying off-plan property will make you a winner if you manage to stick up to your initial plan.
*By Gergana Mineva, certified Senior Real Estate Consultant (RERA 31104) specializing in DIFC and Downtown. You may contact the author by email.
