Off plan properties in Dubai: Investing in 2018

by (Aseel Lulu)

Off plan properties in Dubai: Investing in 2018
Off plan properties in Dubai are continuously proving to be highly propitious for developers and investors, causing not only regional but also international investors in becoming potential buyers as Real Estate developers offer new and exciting ways for investors to park their funds.

With an attentive expansion strategy implemented by Real Estate companies last year, off-plan properties caused a major boost in market momentum resulting in over 70% of all transactions. Moreover, surrounding low priced off-plan properties by present or future infrastructure will affect investment structures greatly by increasing the clients’ value assets and capital gain by selling it at a higher rate later on.
Due to flexible payment plans provided by developers, investors began investing in multiple different properties and expanding them. Some of these big projects that saw a rise in off-plan sales include Dubai Creek Harbour, Downtown Dubai and Dubai Hills Estate which are all developed by Emaar.

Some of these big projects that saw a rise in off-plan sales include Dubai Creek Harbour , Downtown Dubai and Dubai Hills Estate which are all developed by Emaar.

Being familiar with the revenues and shortcomings of the region and the quality of the desired property reduces risks and gives the investor an incentive in regards to the competitive advantage needed to flourish an economic growth in the UAE.

With the legalization of foreign ownership, people from all over the world are coming to UAE, specifically Dubai, to better their career and business opportunities to  gain maximum security  in off-plan investments. In Addition to that, property owners with assets valued at more than Dh1 million and who aren’t in debt are now eligible to apply for either a residence visa or permit.

As per law, ensuring the completion of the project within the timeframe that has been assigned in is vital. The process of linking payments with completion rates, especially in large enterprises, is necessary for the earliest  completion  of those plans. With all the changes arising in the market today, it is essential to go through the developers previous projects in order to determine whether the developer has provided precise reports, particularly if there is intent to lease or resell the property in a few months’ time, which can hinder the buyer's plans.

Like any other project, many risks can arise due to sudden cancelation or delays, over 100,000 units were to enter the market by 2017 and 2018 with greater rental yields, according to data released by The Real Estate Consultancy, GCP-Reidin. However, earnings are deteriorating gradually in Dubai’s affordable marketplace mainly because  compliance costs  associated with development standards and overhead are decreasing.

Prior to implementation, project payments should be provided to guarantee marketing real estate units to develop rapid and easy  financing. Furthermore, payments made regarding any form of off-plan purchases in Dubai have to be addressed to banks that need to be approved by the Dubai Land Department as developers are not allowed to access the funds until certain developments regarding the construction is corroborated and agreed on.

One advantage that works for diverse investors is being able to have  ownership of a property  without having the need to settle the payment straight away, as capital growth can make up for lost profit.

Having a price advantage when dealing with off-plan properties can provide investors with high rental yields and capital appreciation despite the risks that can occur like project delays and cancellation.

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