Buying off-plan property how does it work and what are the benefits
Off-Plan property is an unconstructed or semi-constructed property that is purchased directly from the developer or first-time buyer. The off-plan property market in Dubai suffered significantly during the dark days of the 2008 financial crisis where scores of investors made huge losses. However, recently the market has been making a comeback and promising to flourish in the coming years. In a bid to avoid another crash, the government has enacted certain measures. For instance, the UAE Central bank only allows a 50% loan-to-value ratio. This means that you will need to cover 50% of the property value as a deposit. The method prevents buyers who put only 10% as a deposit and then selling the property at a sky-high price. (1)
Meraas off-plan projects in Dubai are attracting investors from all over the world, with Sur La Mer townhouses being the most recent one. Apart from these, investing in townhouses has also become a new trend. There are several amazing townhouses for sale in Dubai that promise high ROI and flexible payment terms.
If you are unsure whether to invest in an off plan project in Dubai or not then read on to know the benefits of off-plan properties in Dubai:
Low price and friendly payment terms
One of the biggest benefits of buying an off-plan property is that they are offered at a significantly lower price. The attractive prices and flexible payment terms make these properties more affordable and practical when compared to already finished properties. Since there is competition in the off-plan property market, developers are competing prices and lucrative payment terms. After paying the 50% deposit, the rest of the property is spread over a certain period depending on the developer.
High return on investment
Dubai is one of the fastest growing cities in the world and the real estate sector has been a major contributor. Once completed, the value of the property is likely to increase. So, while you are paying the installments as agreed with the developer, you could witness an increase in the market value of the property. Even if you decide to sell it before the completion, you will still get significant capital gains.
High rental yields
Rental income is a prominent feature in the Dubai property market. Since the city is experiencing a steady influx of expatriates, there will always be a demand for rental units. When you buy an off-plan rental property in Dubai, there are chances you will earn a decent rental income once the property is completed.
There are numerous measures taken by the Regulatory Estate Regulatory Authority (RERA) to grant buyers against delays, cancellations, or frauds. For instance, all transactions should be conducted at the Dubai Land Department (DLD) approved banks.