The Dubai real estate market offers a wide range of options. A potential investor faces the choice of purchasing completed housing or apartments in a building under construction. This post will review the situation of off-plan and pre-launch homes in Dubai, as well as the pros and cons of investing in off-plan projects.
Contents:
- What is off-plan and pre-launch property?
- Pros and cons of off-plan investment
- Examples of off-plan and pre-launch investments
- Impact of the crisis on off-plan investment
- Real estate in Dubai: off-plan or completed housing
- Start looking for your dream home now!
What is off-plan and pre-launch property?
In the UAE, off-plan property means purchasing real estate during the construction phase, before facility commissioning. In this case, the value of housing is usually 10 – 20% lower than in completed projects. The off-plan property market offers numerous new residential projects under construction in Dubai, so the choice is always yours.
The term “pre-launch” is also used in Dubai to refer to purchasing square meters at the very first stage, before construction has even begun, at the stage of project announcement. On average, prices of pre-launched homes are 15% lower.
Pros and cons of off-plan investment
The advantages of purchasing an off-plan property are:
- Low prices. Off-plan homes usually cost less than completed residences, meaning that the buyer can save up to 20%
- Wide choice of apartments. At the initial stages of construction, an investor can select any apartments they prefer. By the time construction is completed, apartments with the best floor plans will usually be sold out
- Opportunity of reselling at a profit. After purchasing an apartment in an off-plan building, the owner can resell their property at a profit at a later stage of construction, while all obligations to the developer and further payments will be transferred to the new owner
- Convenient payment plan. Developers offer convenient terms, with a small down payment (5% of the full value) and paying the balance of the amount in installments
The disadvantages of investing at the construction stage are:
- Construction schedule overruns. The facility commissioning date may be rescheduled in the case of unforeseen circumstances
- Market changes and price fluctuations. As all real estate markets are unstable, one should expect that the price per square meter of housing could either increase or decrease
Examples of off-plan and pre-launch investments
If a buyer is facing a choice, investing in off-plan or purchasing pre-launch property, they should take into account that prices of housing at the excavation stage are significantly lower than during construction. An investor purchasing a pre-launch residence will save upwards of 25% of the completed facility value.
Impact of the crisis on off-plan investment
In 2008, the Global Financial Crisis affected off-plan transactions in Dubai that would usually have seen a quick return by subsequently reselling the unit at that time. Many developers were behind construction schedules, which raised buyers’ concerns.
However, the market has taken this experience into account. In 2021, the Emirates have confidently overcome the economic recession caused by the coronavirus pandemic. Forecasts by local experts say that the positive trend in the Dubai real estate market will continue over the next few years. According to these forecasts, the value of construction in the Emirates will reach AED 278.7 billion by 2024, while the market will be developing at even higher rates.
Real estate in Dubai: off-plan or completed housing
If you are choosing between apartments in a completed building and an off-plan property, you should set clear goals. An investor should invest in off-plan housing if they have time on their hands, can wait for the construction to finish, and want to save money. A buyer who can afford to purchase an apartment regardless of the high price and needs to relocate as soon as possible will opt for completed housing.
Start looking for your dream home now!
Start choosing real estate from trustworthy developers! See details on the official website – Off-Plan-Dubai.Ae.
