Dubai is undoubtedly one of the top listed cities to invest in Real Estate business and construction projects. One of the biggest real estate construction projects took place in Palm Jumeirah which included the construction of Apartments, Villas, Penthouses, Shopping Malls etc.
Downtown Dubai is also one of the biggest real estate projects in Dubai. With spectacular views of Burj Khalifa, Dubai Fountain and Dubai Mall, this is one of the hottest properties to invest in.
Off-plan Property in Dubai also provides a great investment opportunity for both foreign and local investors. Before you invest your money to buy an Off-plan Property you need to know what is Off plan property .
Also, it’s wise to know some disadvantage of buying an off-plan property in Dubai as well.
Off-plan property is a property before a structure is constructed on it. The Property is usually marketed to the real estate developers to get an early investment for the development.
The investors are likely to purchase a property from which they can make substantial capital gains. The developers who offer off plan property for sale also provide financial incentives to the early adopters.
The development cycle of such off-plan property is from 12 months to 24 months and during this period there may be enough opportunity for capital growth in the rising market.
Properties that are sold before the construction is done also known as pre-sale properties.
Advantages of buying off-plan property
• In the rising housing market, buying off-plan property enable the investors and the house buyers to buy a property at a lower price
• Purchase price is significantly low as compare to the average prices
• You can buy multiple properties simultaneously as the prices are low
• Small deposits and staged payments
• The buyer can get a property with a specified location with the set of features as desired
• These choices may be limited once construction begins
Disadvantages of buying off-plan property
• One of the main disadvantages of investing in off-plan property is that if the developer goes out of business before the construction is completed the investor or buyer may not able the recover his money or investment
• During 2015 in Australia a loophole was exposed in the legalization which allowed developers to back out the off-plan buying contract at the very final hour
• “sunset clawback” is a phenomenon when the developer takes the buyer investment and holds it for a significant length of time as long as the main construction is carried out.
When the project approaches completion, they resign the deal with the initial buyers and sell the property off at a higher price
• Another problem the buyer face in off-plan property purchase is that the finished property may not meet the buyer’s real expectation
• If due to some reason the value of the property starts to fall before the construction is complete even then the buyer must have to buy the property at original price
• If the buyer is not buying the property as an investor but as a home then there is a risk to promote the property and sell it at a very low price
Tips To Buy a Property in Dubai
Dubai has many Real Estate projects where you can invest your money and make a profit on it. You would find a number of tips for buying Off-Plan property in Dubai.
Let’s discuss some of the most effective and important tips to buy an Off-plan property in Dubai.
1. Budget To Buy a Property
Before you explore to buy a property, consider your financial position (do the math) and discuss it with your financial advisor. With a correct estimate of your budget you can ensure that you don’t bite more than you chew.
2. Identify The Reason
You should be very clear about the reason for buying a property. Is it a home where you are going to live with your family? Or is it an investment property to resell and get the profit? Both are different and both need to be treated differently.
3. Do Your Research
Buying a property is not like going shopping at a mall. For some it is one of the biggest purchase they will ever make. So, this decision should be made after sufficient research.
4. Get Professional Help
You can do your own research which is great, but its not enough. So also discuss and try to take help from real estate professionals.
5. Understand What you’re Signing
Before you sign any contract or do the paper work read all the conditions thoroughly.
So these are some of the important and best tips for buying Off-plan property in Dubai. Whenever you buy a property in Dubai or in any other city you need to be aware of these important tips.