10 Reasons to Invest in Off-Plan Properties in the UAE
In the past several decades, the UAE has cemented itself as a bona fide economy, becoming an integral part of international trade and commerce. Its business-friendly climate has escalated to the zenith of success and has catapulted it into being a forefront of real estate maestro in the world.
While ready-made properties have always been in demand, very few real estate markets have shown the true potential of off-plan properties. The UAE real estate market is one such example that has shone the limelight on the benefits of investing in off-plan property. But before we dive into those benefits, let us understand what an off-plan property is.
What is an Off-Plan Property?
For the uninitiated, an off-plan property refers to a property that is purchased before it is built. Based on the specifications, blueprint, and plans showcased by the property developer, the buyer decides to invest in such a property. In other words, an off-plan property is a property that is either an upcoming property or one whose construction is still going on.
Why Investing in Off-Plan Properties is a Smart Idea?
The demand for off-plan properties in the UAE is always on the spike as the benefits of investing in off-plan property attract investors from far and across the globe. Although there are numerous advantages of investing in an off-plan property, the most prominent ones among them are as follows.
Competitive Price
Since budget is the main constraint and pillar of decision-making in real estate investments, let us start with that. Off-plan properties are significantly more affordable than their ready-made counterparts.
As you are sacrificing the ability to immediately move in after your purchase, the developers more than make up for it by offering you high-end luxury properties at an economical rate. With highly-rated real estate developers competing for your attention, you get a lucrative deal when you head out to purchase an off-plan property.
Flexible Payment Options
To further sweeten the deal for you, developers offer flexible payment options for you. This makes the buying process even easier as you don’t have to burn a hole in your pocket at the time of purchase. The compartmentalized payment options offered by the developers break down your total payment into various segments, thereby increasing your affordability. Many developers also provide the option to pay with crypto.
With a minimal down payment, you can pay the rest of the payments during the construction and after the handover of the project. This widens the pool of interested investors as they don’t have to churn out a large portion of money in one go.
Potential for Capital Appreciation
Investing in off-plan properties in the UAE is a smart investment, especially in the high potential areas in Dubai and Al Marjan Island in Ras Al Khaimah, because of its capital appreciation potential. This means whatever price you pay for the property, it will eventually increase in due time, giving you profitable options for re-selling the property.
So, a huge chunk of people is not buying such properties to merely reside in them but to keep them as a smart future investment for profit generation.
Diverse Range of Options
The UAE is the epitome of luxury. A lavish lifestyle is synonymous with its real estate empire. So, it goes without saying, that the off-plan properties of the UAE leave no stone unturned in highlighting this luxury to potential investors. Leaving you spoilt for choices, you will find everything and anything you can imagine in the property world here.
From economical studio apartments to opulent villas, from exuberant townhouses to chic penthouses, you name it, and you will find it among the off-plan properties of the UAE.
Choice of Prime Location
The UAE is an economic hub that stands at the forefront of international trade for Asia, Africa, and Europe. Across the nation, there are prime locations that are always high in demand among investors because of the avenues they provide.
Dubai and Ras Al Khaimah are such examples whose geographical location accentuates their appeal because of the business opportunities, the serene landscapes, and the urban lifestyle they offer to their residents. And off-plan properties in Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah are among the best in the nation.
Latest Design and Features
As off-plan properties are in the development stage, you can expect the developers to employ the latest designs and features to ensure they check all the boxes of modern amenities. So, whatever feature a ready-made property has, you can expect an upgraded version of that in an off-plan property as they can pick up the ongoing trends during their development stage.
The UAE has always embraced modernism and the latest in technology and architecture. Therefore, it only makes sense to optimize it in your real estate investment as well through off-plan properties.
Personalization Opportunities
Your home should reflect your personality. The more opportunities you can grab to personalize your living space, the better the appeal of a property is. Personalization is one of the key USPs of off-plan properties as you can play around with the designs and layouts to give your home the vision that you have in mind.
This also increases the individualism of your home. As you get the option to suggest changes in your unit, you can ensure your property is personalized to reflect your style.
Robust Buyer Protection Laws
The Government of the UAE has put in place stringent laws to safeguard the interests of the investors. One of the biggest fears first-time investors have is the worry of the completion of an off-plan property and whether they are genuine.
To make sure the money of investors doesn’t go to waste, various protection laws have been initiated. You will get a confirmed completion date of the project and if the project is not handed over to you in said time, there will be repercussions for the developer. In addition, banks also don’t transfer the money to developers until a pre-decided percentage of completion of the project, thereby protecting you from fraudulent activities. The laws are so strict that you can invest from the UK or any other part of the world without worring about it.
Promising Rental Returns
Off-plan investment in UAE offers huge margins of ROI (Return on Investments) with high rental returns. As such, you can ensure you have a steady and stable source of income that is more than enough to sustain even in a lavish city like Dubai.
So, even if you are not personally living in the property, you can put it out on rent and profit from it. The tourism industry in the country is rampant and so is the settlement from other nations for work opportunities. In both cases, you get rental choices that are highly profitable.
Low Maintenance Cost
Another underrated benefit of investing in off-plan properties is that you have minimal maintenance to take care of. In most cases, when you buy directly from a developer, you get numerous warranties and after-sales support.
From maintenance issues to resolving construction defects, the developers take care of a bunch of aspects that you otherwise would have to pay for in a ready-made property. So, you end up saving a fortune by avoiding spending money where you don’t have to.
To Conclude
Off-plan properties have played a pivotal role in accentuating the appeal of the UAE real estate market worldwide. With affordable prices, flexible payment options, and high rental returns, your chances of profitability increase steadily with these properties.
Furthermore, you get more opportunities to go for the desired unit and customize designs. Additionally, the Government of the UAE has put strict laws in place to protect your investment, proving why investing in off-plan properties is a smart idea.
FAQs
Frequently Asked Questions about Investing in Off-plan Properties
Which are the best off-plan projects in the UAE to invest in?
There is no lack of options in the UAE when it comes to off-plan properties as real estate developers are announcing new launches every now and then. One of the most anticipated off-plan projects of the current time that is making huge waves across the country is the Aqua Arc on Al Marjan Island in Ras Al Khaimah, which is set to transcend the boundaries of luxury living.
Is it safe to buy off-plan property in Dubai?
Yes, it is absolutely safe to buy off-plan property in Dubai. The Government has initiated several strict measures to safeguard off-plan property investments by ensuring buyers' rights are protected at all costs.
Do banks finance off-plan properties in UAE?
Several reputed banks offer mortgages to finance off-plan properties in UAE once a certain percentage of the total property value is paid by the buyer. For most banks, the maximum loan-to-value ratio for off-plan properties is 50%. However, few banks can have additional requirements based on the property developer, project location, unit type, and other factors.
What happens if you can’t pay for your off-plan unit?
Non-payment leads to a breach of the Sale Purchase Agreement (SPA), and the Dubai Land Department (DLD) is notified about it. The developer may have the right to retain a partial deposit based on your SPA. The refund amount varies based on several factors, including the developer's policies, the construction stage, and any applicable penalties mentioned in the contract. Before buying the unit, communicate with the developer on this and thoroughly review your SPA.
Can you sell an off-plan property before completion?
Yes, you can sell an off-plan property in the UAE before its construction is completed, but you may have to follow the terms and conditions laid down by the developer.
When can you sell the off-plan property?
Although it varies from developer to developer, usually you can re-sale an off-plan property once 30-40% of the payment has been made.
Can you get a UAE Golden Visa with off-plan property?
Yes, you can get a Golden Visa with an off-plan property as long as the total property value is min AED 2M.