Investing in Dubai’s Off-Plan Properties? You must know these key aspects first

The Dubai real estate market has always been one of the most popular investment choices for foreign investors. With the new market trends, investing in Dubai real estate is easier and highly lucrative, especially for off-plan properties in Dubai. 

As you may already know, off-plan properties are properties that are under construction. Here, the developer signs a contract to finish the building and prepare it by the stipulated date. 

Besides lower prices and flexible payment plans, off-plan property purchase allows you to enjoy capital appreciation when it's ready for occupation. In addition, Dubai has witnessed the development of several modern and luxurious properties which exceed international standards. 

According to the Khaleej Times, the UAE registered 90,881 real estate deals setting a new historical record high after 81,182 transactions. This report also showed that off-plan real estate investment was subject to a 92.5% spike. 

In other words, the Dubai property market opens a plethora of opportunities and benefits for investing in off-plan projects in Dubai. 

Let us look at it in some detail. 

Property Regulations In Dubai

One of the primary concerns of purchasing an off-plan property in Dubai is fraud or delays in completion. However, the Dubai Land Department (DLD) has adopted strict measures to protect investors from such risks.

Through the DLD’s official website offering the ‘Project Tracking’ service, a buyer can monitor the progress of a project. It is vital to ensure that the project’s status follows the payment schedule. Once DLD confirms that it has completed a certain percentage, as promised earlier, you have to make the payment. On the contrary, you are not under obligation to make the payment if you do not receive a confirmation from the DLD. 

What’s more? A subsidiary of the DLD, namely the Dubai Real Estate Regulatory Agency (RERA), supervises that these rules are followed. Failing to abide by the policies will impose penalties on developers who violate obligations. 

Now, let us go through some of the other things that you need to learn before investing in off-plan properties in Dubai. 

Purchasing Off-Plan Properties In Dubai

Is buying property in Dubai a good investment? If you have this question in your mind, you must be aware of the pros and cons of such investments. 

Despite the risk of unexpected changes in the final product and fluctuations in market conditions, investing in off-plan properties in Dubai is greatly rewarding. All you require is diligence, patience, and the right assistance. So, ensure that you resort to the best and most experienced local real estate agents in Dubai. 

Since the real estate market in Dubai is robust, you should know about all recent trends and developments to make an informed investment choice. Some factors that play a critical role in helping you plan your investment are as follows: 

Location

Without a doubt, location impacts real estate investments to a great extent. Before you invest in Dubai real estate market, you must research prime locations and the advantages of living there. Choosing properties in areas with good demand is of utmost significance. You can rest assured that it will fetch you a high stream of renters and ultimately improve the capital appreciation rate. 

Expenses

Just like purchasing a ready property, you have to pay charges to the Dubai Land Department.  The property registration fee, in this case, amounts to 4% of the property value. You can pay some part of the entire DLD registration fee to attract buyers and save 4%. Also, AED 3000 is the charge for the Oqood Registration. 

Mortgages

It is indeed disappointing that mortgage financing is not valid for off-plan properties in Dubai. A buyer can claim a mortgage only if they have property papers as collateral. In certain conditions, banks offer financing for properties under construction with a 50% loan-to-value ratio. If you do not have the potential to fund 50% of the price, you can opt for equity release mortgage payments. It enables you to convert your property value into cash. This option allows you to borrow a maximum of 85% of the total property value. 

Amenities

Ensure that the property has facilities that suit the lifestyles of renters seeking convenience and luxury. In addition, off-plan properties must have nearby access to all essential commodities.

Best Areas For Investments In Off-Plan Properties In Dubai

As mentioned earlier, you have to choose the hotspots for investments in off-plan projects in Dubai. Below are some options for you to consider. 

Palm Jumeirah

The palm tree shaped island of Palm Jumeirah has been built from reclaimed land. Since it is a man-made island, it offers easy access to the rest of Dubai. Palm Jumeirah is a great place to live due to the presence of exclusive restaurants, hotels, and shopping venues. 

Jumeirah Lake Towers

One of the largest developments in Dubai, Jumeirah Lake Towers is an extremely popular location for residential purposes. With a plethora of multi-purpose options and leisure facilities, Jumeirah Lake Towers holds fantastic potential for real estate investments. Apart from its top-class urban lifestyle, its speciality is that the area is pedestrian-friendly, with footpaths connecting residential buildings. Moreover, its pet-friendly community lets you take your pet out on walks.

Business Bay

This mini-metropolis is vibrant, with contemporary luxury boosting its identity. It exhibits fantastic architecture through the various high-rise buildings comprising offices and residences. The main attraction of Business Bay is undoubtedly the mesmerising Burj Khalifa.

MBR City

Mohammed Bin Rashid City is worth investment due to its tax-free zone and an array of beautiful properties. This freehold area is a mixed-use development that comprises various attractions like lagoons, parks, and so on. What’s more? MBR City is home to the Dubai Mall, a lavish shopping outlet with a wide range of leisure activities. 

Sobha Hartland

If you wondering whether Sobha Hartland is worth investing in, you must know that it is popular among families for its luxurious and thoughtful features. Its architecture and civic amenities are the major highlights. In addition, daily life at Sobha Hartland is extremely lively due to shopping hubs, cafes, restaurants, and so on. 

Wrapping Up

Investing in Dubai's real estate market comes with lucrative benefits for investors, but it is important to conduct thorough research and understand the market before making an investment.

Stay informed about the market conditions and the trends in the real estate industry. Also, make sure to work with a reputable real estate agent in Dubai and a professional real estate legal advisor to ensure a smooth transaction and to protect your investment.

For more insights, here are some of our recent articles: 

Buying property in Dubai: What investors need to know

Discovering the Current Market Prices of Popular Areas in Dubai: A Comprehensive Guide in 2023

Where to buy real estate in Dubai? Your Guide to Investing in the Real Estate Market. 

If you are looking for help regarding investments in off-plan properties in Dubai, contacting The Pearl Gates would be the perfect option. Drop an email to contacts@thepearlgates.com or get on a phone call with us at (+974) 44104253 / (+974) 50867771. 

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