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Things to Consider While Buying Off-Plan Properties in Dubai

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Summary: UAE has been a preferred destination for real estate investment since the last two decades for foreign nationals and Dubai has some world-class properties to offer to the discerning buyers. The cosmopolitan lifestyle and robust infrastructure of Dubai attract real estate investors from all over the world. There is a huge inventory of apartments and condos available in Dubai and it requires extensive research to find the best deals.

Over the years UAE real estate has shown gradual appreciation which has made it attractive to domestic and international buyers. Rentals have also seen steady growth and it has become a buyer’s market. Off-plan properties in Dubai are constantly looking for buyers to invest in their projects and reap rich rewards. There are several advantages of investing in Off-plan projects in Dubai but you must take into consideration several factors before signing any deals.

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Carefully plan your real estate investment in Dubai by making a site visit

Choose your area of investment after taking into consideration good medical facilities, schools, supermarkets, and public transport connectivity. Ensure that the surroundings are well developed, inhabited and you have access to basic amenities. Also, make sure that homes are equipped with smart technology to make your day-to-day living easier. Check the track record of the developer and make a site visit to the completed projects to see the quality of construction and electrical and sanitary fittings.

Take a look at the sample flat for a housing project under construction as it will give you the fair amount of idea about the layout and fixtures. Make sure that things promised by the builder in the brochure are listed in the sale agreement. It is recommended to opt for a construction linked payment plan so that you can stagger the payments as per the progress of construction. The maximum loan-to-value (LTV) ratio during the construction period is 50 percent, so you need to pay at least half the value before a bank can finance the property. Some Off-plan properties in UAE also offer the option of paying a certain amount as initial down payment and the balance payment upon handover of the property. Also, ensure that all payments are directed towards the project’s escrow account and not directly to the developer.

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Choose the housing project carefully and scrutinize the documents thoroughly

The common problem faced by the real estate investors in Dubai is the delay in the handover of the property by the private real estate company. The UAE government has imposed strict regulations that must be met by the developer before selling housing units in a residential project. These include complete ownership of the land the property is built on, a 20 percent payment as a bank guarantee, a deposit of 20 percent in escrow or to reach 20 percent of construction depending on the emirate where the property is located. The sale-purchase agreement should mention the expected date of completion of the project and how the developer is going to compensate for any delay in construction. You must have patience if you want to get a good return on investment in UAE real estate by focusing on long term investment.    

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