Off Plan Property In The United Arab Emirates

Is off-plan property in the United Arab Emirates suitable for me?

Off-plan property offers a number of advantages over other types of real estate:

• Off-plan purchase allows investors to buy at the earliest and lowest possible price and achieve maximum returns on their investment
• Many investors decide to hold onto their properties for a number of years and receive excellent rental income, often helping to cover their monthly loan repayments. During these years, they also enjoy a holiday home, while watching the value of their property increase steadily
• Other buyers sell on their off-plan contracts prior to project completion, cashing in on capital growth, as well as avoiding the costs of actually owning the property

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How can property be cheaper if bought off-plan - How does it work?

In order to limit financial risk and debts, the developers of any project will wish to sell units off-plan. They understand that if buyers cannot see a physical property at the beginning, they will demand a lower price, while relying purely on the developer's reputation, the property location, artistic impressions and computer simulations on which to base their decision to purchase.

In addition to the excellent off-plan price, some highly beneficial finance structures are often in place. You sometimes need to pay only around 20-40% of the purchase price in the form of a deposit, while the rest is payable upon completion. This may be financed by a mortgage if necessary (see our mortgages in the UAE section).

If you decide to invest in off-plan property, you will need to decide which strategy to adopt to achieve your desired return on investment. Our experts will help you to choose the most appropriate plan, creating an investment programme suitable to your needs, whether this is "pure investment" or a "buy-to-let" strategy. We will also assist you in finding the most appropriate location to suit your investment needs.

Off-Plan Property in the UAE

Off-plan property is the main option for foreign real estate buyers in the UAE and this market is robust, while some new developments are selling out within only 48 hours of release. In many cases, off-plan buyers have seen their properties gain value significantly, even before their keys have been handed over.

Through the International Property Investment Network (IPIN), we carefully vet the offers of developers, working only with the most reputable, secure companies in your favoured location.

Maximizing Profit from Off-Plan Investment in the UAE

The Process of Price Increase

1. Purchasing early
   Prices never remain low for long and, as construction progresses, prices begin to rise steadily. In the UAE, as in any other market, it is important to buy during the earliest stages of development when prices remain extremely competitive, but are already beginning to rise. The earliest investors will invariably see the greatest returns.
2. Purchasing the best units
   Early purchase also allows investors to choose the most sought after properties on any given development. The best units always offer the highest capital appreciation in the smallest time frame, and can often demand the greatest rental incomes. Penthouses are often firm favourites.
3. Price increases as development matures
   As the development begins to be constructed, the value of the units begins to increase. A completed show home is normally available for viewing at this stage, while buyers often feel they are taking less of a risk as they now do not need to rely entirely on plans.
4. Price appreciates as more units sell
   As more units are sold, the price of the remaining units rises. Units sell faster when buyers are able to physically see them. There is often a phase payment structure in place which mirrors the increasing value of the properties. To the early investor this means that, should you decide to sell your property, it will be worth considerably more at this stage than when you made your initial purchase and paid the deposit.

Since foreign ownership became legal in the UAE, investors have seen a relative slow-down in growth from their off-plan property. However excellent investment choices can still be made, particularly in the up-and-coming emirates, while they soak up a relentless demand for property from neighbouring Dubai. We are dedicated to helping you to pick the best UAE property options to suit your particular needs.

Investors should exercise careful due diligence and choose wisely, making entirely sure that the property is located in an area where they will resell quickly and easily or where there is a high rental demand for their buy-to-let option. With an off-plan investment, even in the "worst case" scenario if the property cannot be sold upon completion, the final balance due can sometimes be financed by the developer himself, typically over 4 years or more. Furthermore, the rental income may pay off the finance of this loan as well as yield further eventual returns on investment.

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