5 reasons to invest in off-plan properties in Dubai
The UAE has carved a niche for itself in global real estate. Dubai continues to draw institutional and individual investors, who are incentivized by the growing investor-friendly reforms, diversified property offerings, and ease of mortgaging, among others. Interestingly, the investor appetite is uniform across off-plan and ready-to-move-in properties. According to experts, with rental returns currently growing at the fastest rate since 2014, many are turning towards off-plan properties, which tend to be considerably cheaper than their ready-to-move-in counterparts.
As a result, off-plan properties are flooding the real estate market, with builders guaranteeing superior services and state-of-the-art amenities. While off-plan properties do have their upsides and downsides compared to turnkey ones, there are a few credible reasons to invest in them. Beforehand, it is important to understand that, in off-plan transactions, potential buyers enter into a contract to acquire a real estate property before it is developed, based on the building or property plan, designs, and the developer’s track record, among other reasons.
- Lower prices with flexible payment options
One of the most apparent perks of buying an off-plan property is that it is offered at a substantially lower price compared to ready-to-move-in ones. As a result, investing in such properties is considerably more profitable keeping in view the future appreciation. Besides, off-plan properties accompany tempting offers and flexible payment plans. Examples include the “1% per month” payment plans, or 50% upfront payment and 50% upon completion. Even within the off-plan segment, there is competition in pricing, with projects being released every month in large numbers.
- Capital gains
The UAE is one of the fastest-growing economies and offers a high return on investment, especially when it comes to real estate. Significant return on investment is not only limited to upmarket sites like Downtown Dubai or Dubai Marina; Jumeirah Village Circle, Arjan, Arabian Ranches, and Al Barsha South, too, are generating good returns. Thus, the market value of off-plan property is likely to increase during the construction phase. At a time when real estate is increasingly being seen as a hedge and Dubai as an investment haven, affordable off-plan properties are rightly in demand.
- High rental returns
Underscored by the new labour laws, relaxation in travel/tourism, and formulation of remote work visas, there has been an upswing in expat influx. This has had a direct impact on the rental ecosystem, where returns are on a steady rise. So, for those seeking buy-to-let properties, this is an opportune moment to invest. If renting is the primary objective, off-plan properties are more feasible than turnkey ones due to the former’s flexibility to be purpose-built and customized for rental purposes.
- Dubai’s property laws
In order to safeguard buyers, investors, and builders against any contract terminations, disruptions, or scams, the Real Estate Regulatory Authority (RERA) and the Dubai Land Department (DLD) have directives in effect. Investors are advised to conduct all transactions and investments through DLD-approved banks to minimize irregularities and inconsistencies. The regulators provide investment security by virtue of their ethics guidelines for developers, owners, brokers, etc.
- Custom finishes
Off-plan acquisitions provide the leeway to make certain adjustments and architectural changes throughout the pre-construction stage. Also, investors are able to get hands-on knowledge of the material and labour quality during the construction stage, thereby ensuring they get their money’s worth. At times, developers also accommodate certain structural and cosmetic changes to the property. The scope for such is limited in ready-to-move-in properties.