OFF-PLAN PROJECTS IN DUBAI
Everything You Need To Know

What is an off-plan property
An off-plan property is an unconstructed property purchased directly from a developer or in some cases a first owner. In the case where the buyer is buying directly from the developer at time of purchase the buyer usually pays a 10-20% down payment and signs SPA (Sales Purchase Agreement). Depending on which developer the rest of payments made can and do vary but are usually linked to construction.

Advantages of buying off-plan property

SAVE MONEY

Buying an Off-plan property allows investors to get a purchase price at the earliest and lowest possible price. It also allows buyers to choose the very best apartments in a development. This plays a big part in increasing the chances of gaining the maximum return on their investment.

SELL BEFORE COMPLETION
Buying an Off-plan property allows investors to get a purchase price at the earliest and lowest possible price. It also allows buyers to choose the very best apartments in a development. This plays a big part in increasing the chances of gaining the maximum return on their investment.

LOWER UP-FRONT COSTS
Payment plans for off plan property can and do vary from developer to developer. With some developers only requiring a 10% down payment and the rest linked to constructions the outlay required is relatively low.

Potential Risks in buying off-plan property

DELAYED COMPLETION TIME

Developments don’t always go to plan and there have been cases of projects being completed after their scheduled completion dates. It is for this reason very important to do your research on the project developer. Look into their track record and ensure any sale agreement signed ensures you are compensated for any such delays.

CHANGE IN MARKET CONDITIONS
A downward move in property prices can result in the property being worth less than what the buyer has paid. This risk is not limited to off plan properties but can affect them more as they may be harder to liquidate than ready properties.

What guarantee do I have that my development will be completed?
To help ensure an off-plan project is completed, RERA has introduced numerous measures which must be met by the developer. One of these stipulates that the developer must own 100 per cent of the land belonging to the project. Along with this the developer must either make a down payment of 20 per cent as bank guarantee, deposit 20 per cent in escrow account, or complete 20 per cent construction before selling off plan. Together with the above measures, RERA requests contractors to submit a 10 per cent performance guarantee.
Along with these measures, it’s imperative buyers do their own research and look into developers they are considering buying from. We recommend looking the developer’s track record as well as reputation.

When can I sell my off-plan property?
Numerous measures have been put in place to ensure the Dubai market is a stable and secure market to invest in. One of these measures has a direct impact on buyers who look to sell their off-plan property before completion. Dubai’s largest developer Emaar Properties now requires owners to have 40% of their off-plan property paid off before it can be sold to a new owner. This figure of 40% does vary from developer to developer so it’s important to check with each developer.
Once the minim repayment threshold has been met the process of selling an off-plan property is very similar to selling a ready property. Buyers and seller agree to price and terms, sign contracts and apply for NOC where the new buyer is registered with the developer and ultimately takes over all the outstanding payments once transfer is complete. It is also worth nothing that contrary to popular belief the new buyer is responsible for the 4% DLD Transfer Fee regardless of the fact this has already been paid by the first buyer.

Guide To Buying Off-plan Property In Dubai

See our comprehensive guide to buying off-plan property in Dubai. Being prepared and knowing your objective from the outset will ensure you buy exactly the right off-plan property.

What are your reasons for buying?
Will you be buying an off plan property for purely investment purposes or will this be somewhere you would like to make your home?
Certain off-plan developments are more suited to investors whilst others are more fitting for end users. Being clear on your buying purpose will help narrow down your options and tailer your approach.

Decide on the on the area and type of property you want
With a host of off plan options out there its searching for your off plan property can be quiet overwhelming. To help avoid this its beneficial to have a shortlist of preferred areas as well an idea as to the type of property desired i.e. apartment, villa etc.

Know who you are buying from
Do your research and ensure you are familiar with the developer you’re buying from. Find out about their track record and reputation. Past projects are always a good indicator of what you can expect.

Know the Project/Development
Take time to learn about and know about the development you are buying in. It’s important to be familiar with the project you are considering as well as the overallmaster development. Important factors to consider when deciding if a development is right for you are:

  • Development size – No of floors and units
  • What will it look like and what materials will be used
  • What facilities and amenities will be available
  • Residents and visitor parking arrangements
  • Residents in and out car access points
  • Proximity to other buildings and structures. Will these affect the building and how?
  • Planned retail outlets within the development or at least the provision for these
  • Master development and how it will affect your project

Most developers these days will provide mock-up apartments along with extensive marketing material. These go a long way to answer most of these questions and mean buyer have a very good sense of what they are buying.

Know exactly what you are buying
Once you have decided which development you wish to buy in the next step is to decide on which unit you wish to buy.

Pay close attention to:

  • Unit size, floor height and layout
  • Unit orientation and position within the development
  • Likely views from main living areas as well as bedrooms
  • What is included? i.e. white goods, furniture, landscaping

Understanding these factors will ensure you get what you paid for as well as the view you paid for.

Read your contract carefully
Make sure you understand what you are signing before signing. It is important you are fully aware of your obligations as well as the obligations of the developer. We recommend getting professional advice and leaving no stone unturned

Buy and Budget Correctly
Buying off-plan property does not require full payment up front but rather staggered payments which are usually linked to construction. To avoid surprises ensure you are aware of your payment plan obligations and in a position to meet these as required

Know the area and its potential
When buying off-plan property it’s crucial to consider more than just the unit and the actual development you are buying in. Research the area you are considering in and ensure its somewhere you should buy. This is even more important for projects for new and developing communities. Factors to take into consideration are:

  • Nature of projects planned for the area and completion estimates
  • Availability of community centers and shopping outlets
  • Proximity to schools, medical centers and places of interest
  • Road access and public transport links
  • Area demographics and housing demand

All the above-mentioned factors need be taken into equation and will play a huge part in the value of your property upon completion

Have an exit strategy and a contingency plan
Whether your off-plan purchase is purely and investment or somewhere you will live in its important you have a contingency plan and an exit strategy. Should you need to sell it is crucial to know when doing so is permitted as well as the associated costs.

For Investors
Make sure you understand what you are signing before signing. It is important you are fully aware of your obligations as well as the obligations of the developer. We recommend getting professional advice and leaving no stone unturned

  • Investors buying an off-plan property can only pay a minimum deposit such as 10% or 15% of the sale price to secure that property; thereby, allowing investors to sell the property with a profit when market prices increase. However, note that not all developers allow the flipping of new homes. On the downside, such a transaction is risky as there is no guarantee that properties will increase in value.
  • An off-plan property that appeals to buyers overseas usually sells rapidly and at higher prices
  • Values of off-plan property starts going up when the real-estate project is partially completed. Buyers feel that they would take less risk if they can see completed units before their very own eyes. Therefore, investors are likely to attain higher returns from the sale of their off-plan property, after a partial completion of the structure.

How to Sell an Off-Plan Property in Dubai

If you are thinking of selling your off-plan property:
Whether your off-plan purchase is purely and investment or somewhere you will live in its important you have a contingency plan and an exit strategy. Should you need to sell it is crucial to know when doing so is permitted as well as the associated costs.

  1. You must confirm that the project has been registered with Real Estate Regulatory Authority (RERA), which is a government agency that regulates all real estate activities in Dubai.
  2. Your developer has an escrow account registered along with the registration documents from the relevant authorities.
  3. If your buyer is an expatriate, make sure that s/he submits a copy of their passport and a completed reservation form, which includes the personal details of the buyer and seller, payment plan details and a summary of the basic terms and conditions of the sales agreement.
  4. Ensure that your buyer has transferred the deeds at the Land Department offices in Deira; if the property is already registered or at the developer’s office even if the property is yet to be completed.
  5. Your buyer will be handed a copy of the Title Deed. S/he will get the original copy from the Bank after paying the mortgage in full. The Bank will also give the buyer a Letter of Release and an NOC.
  6. An additional original copy of the Title Deed is held at the land department. In order to process that document, an NOC has to be obtained from the developer.

In short, depending on whether your off-plan property is complete or incomplete, you need to have the following paperwork:

Nature of projects planned for the area and completion estimates

  • Valid Passport copy
  • Property Completion Certificate
  • Proof of service fees payment (in case of completed property)
  • NOC from the developer
  • Receipts of payment to developer
  • Proof of address
  • Title Deed
  • Signed listing agreement (approved by RERA)

General Status of Selling Off Plan Property in Dubai
Nowadays, investors in Dubai are facing more restrictions on reselling their original off-plan properties. Some real estate development companies like Emaar and Nakheel allow re-sale only after the original purchaser has paid a substantial amount of the sales price; which can be almost 40%-50% of the price. Some other companies such as Damac do not place any restrictions on re-sales. Therefore, investors should choose a developer that offers conditions convenient to their selling plan

OFF PLAN vs READY PROPERTIES

Off-plan

PROS

  • Lower purchase price
  • Higher capital appreciation
  • Attractive and flexible payment
  • Lower upfront cost


CONS

  • No immediate return on investment
  • Cannot move in or rent out immediately
  • Risks related to delays, plan, cancellations or poor
  • Finish
  • Potential market changes and declines

Ready Property

PROS

  • Immediate return on investment
  • Can move in or rent out immediately
  • Less risky — completed
  • You get what you see or pay for


CONS

  • Higher purchase prices
  • Must pay all upfront – less flexibility
  • Lower capital appreciation
  • Pre-owned property

Off-Plan Services from
MJB Properties

We work closely with largest and most trusted developers in Dubai meaning we allow you to compare prices and features by providing you an entire range of options based on your needs, preferences and budget. We believe off plan properties in Dubai is a fantastic investment, so we work with passion. Our services are 100% free with no hidden cost
We also offer you to connect directly to top developers with our call back option. Anyhow, if you want a quick response from developers, you can use our live chat option to connect online with property developers. Property search has never been easy as before. We help you with all aspects of purchasing property in Dubai to ensure that everything goes as smoothly as possible.

What We Offer?
Access to full range of stock from all major developers?

  • If you are planning to buy an off-plan property in Dubai, you are at a right place. We ensure you secure the best property investment in Dubai. So, we will provide you complete and the right information that will help you find your home according to your needs and budget, or a great property that will help you earn great investment returns.
  • Tie-Ups with Major Developer of Dubai Right from Luxury to Budget Apartments/ Villa’s
  • Complete Project information
  • We provide complete project information to our customers from location map, completion date, payment method, distinct features, floor plans, project videos, construction photos and other information you want to know. We able you to compare prices and features of different projects all in one platform
  • Site Visit
  • Latest Availability Stock
  • Show-apartment/ Villa Visit (If Available)
  • Excellent market knowledge & step-by-step guidance
  • Direct connect to top developers
  • VIP Services (Pick & Drop Services) in High End Cars
  • We don’t Charge our Buyers any Commissions (100% free-no cost services)
  • If you are planning to buy an off-plan property in Dubai, you are at a right place. We ensure you secure the best property investment in Dubai. So, we will provide you complete and the right information that will help you find your home according to your needs and budget, or a great property that will help you earn great investment returns. Let’s start browsing and find the best-off plan property in Dubai.