Buying into a pre-sale home gives access to brand new developments, flexible payment plans, and the chance of a pre construction property. That said, because you’ll be buying a property which may still be in the development stage it is very important to do your research before putting in a financial investment.

If you are a buyer looking for a guide to buying off plan property in Dubai this article covers the process from selection of a project and due diligence on the developer to the signing of the agreement, making payments, and going over buyer protection issues.

Whether you are a first time home buyer or a researcher oriented for how to invest in off plan property Dubai, having a clear plan which is clear can help you make a more informed decision.

What Is an Off-Plan Property?

Before completion of construction you buy what is called an off-plan property. Instead of the final product which is a fully finished apartment or villa, the buyer puts faith in the project plans, specifications which are laid out at the time of purchase and the contract terms.

This includes apartments, villas, townhouses also which are within new developments.

What it means for a how off plan property works in Dubai to be off plan is a key issue which buyers must study. This includes the developer, build out timeline, payment terms, contract details, registration issues, and expected handover.

Benefits of Buying Off-Plan Property in Dubai

There are many benefits of buying off plan property in Dubai.

Access to New Developments

Off plan sales allow for entry into projects which are still under development. We see a regular introduction of new property launches in Dubai which in turn gives buyers a range of which up and coming communities and developments to choose from best ares to buy property in dubai.

Flexible Payment Structures

Some developers provide payment plans which are paid in stages as opposed to the full purchase price at once. The exact structure of the plan varies by project and developer.

Potential Investment Opportunity

Investors that go for off plan properties do so because they may see that the price of the property will change in favor between the time of purchase and completion. But also which of these investments will pay out is not a sure thing and plays into the hands of many factors that include the market, location of the property, supply and demand issues, project quality and more.

Step-by-Step Guide to Buying Off-Plan Property

Here is a step by step guide to buy off plan properties in Dubai.

1. Define Your Budget

Start out by figuring out what you can afford. Also include in your calculation the registration fees, service charges, financing costs and any other associated expenses.

If when you are going to finance the purchase do your research to determine your eligibility and what your contribution will be.

2. Research the Location

Location plays a large role in a property’s future demand and value.

Consider transport options, schools, shopping facilities, work areas, planned infrastructure, community amenities, and comparable property prices.

When looking at different areas, we see that research into which neighborhoods do best for real estate agents in Dubai gives you that out.

3. Research the Developer

Before diving into a project check out the developer’s history, completed projects, project development status, and contract details.

Do not base your decision on advertising and promotion.

4. Verify the Project

Dubai has a regulatory structure which requires planning projects to meet registration and escrow requirements. DLD’s project registration service reports that developers must register eligible projects and open an escrow account for off plan sales.

Buyers are to check the project’s registration status and related info through official channels before making payment.

5. Compare Payment Plans

In Dubai the primary element of buying off plan property is to know exactly when payments are due.

Request a payment plan and note:

• Initial payment
• Instalment dates
• Construction-linked payments
• Handover payment
• Post-handover payments, if offered
• Registration-related charges
• Other applicable fees

How Do Off-Plan Payment Plans Work in Dubai?

Developers may pay for a project in installments. For instance a project may see an initial payment with the balance due at certain set dates or as we approach specific construction milestones.

In each case the schedule is different, thus buyers may not see common structures in off-plan properties.

In Dubai the Land Department also reports on and administers project escrow accounts which include requirements related to project progress and payment outlay.

How RERA Protects Off-Plan Property Buyers in Dubai

In Dubai RERA’s role in protecting off plan property buyers is a key element of the process.

Dubai has a system in which payments from buyers of off plan units go into project based escrow accounts. DLD reports that these accounts are put in place to regulate construction and also to protect investors’ rights.

DLD’s projects also have requirements which include that related to the land, project approval, construction guarantees, and registration of the development.

Buyers are also to do their own research. We still see that regulatory protection does not absolve the issue of reading the terms of the contract, verifying the project, understanding payment terms, and evaluating the developer.

6. Review the Sale and Purchase Agreement

Before you sign, go over the Sale and Purchase Agreement (SPA).

Pay attention to:

• Unit details
• Purchase price
• Payment schedule
• Expected completion
• Handover conditions
• Buyer obligations
• Developer obligations
• Cancellation provisions
• Default clauses
• Service charges
• Other applicable fees

If at all something is not clear to you, get in touch with a professional for a second opinion before you sign.

7. Register the Off-Plan Purchase

Off plan sales go through the Dubai Land Department process. DLD’s initial sale service enables developers to put off plan units in the provisional register via the Oqood system.

DLD reports that the sale and purchase agreement should be put in the provisional register upon its issue.

Keep a record of your SPA, payment records, registration documentation, and that which you send to the developer.

Buying Off-Plan Property for Beginners

For first time home buyers the greatest error is in only looking at the advertised price.

Instead, consider the complete picture:

Location + developer + project registration + payment plan + contract + construction progress + total costs + investment objective

First time buyers should also steer clear of projects that are presented as time sensitive.

Can You Buy Off-Plan Property From Abroad?

Yes we see that international buyers may not have to be in Dubai at each stage as they look into pre-sale properties. But which documentation is required and how the transaction goes through will depend on the buyer’s situation and the specific deal.

If you are into foreign pre-purchase of property go in with your eyes open to what identity verification, payment procedures, contractual terms, registration, and power of attorney issues may come up.

DLD also has put in place for transactions which include representatives and powers of attorney which also includes requirements of documents issued outside the UAE.

Can I Sell My Off-Plan Property Before the Building Is Finished?

Can I put my off plan property up for sale before the building is done? In some cases a property owner may put forward and transfer an off plan property before completion which is a possibility in certain projects’ terms and conditions, registration issue, developer rules, and also as per the relevant regulations.

Before you put your project up for resale at an early stage, check out the SPA and also verify with the developer and the relevant authorities which procedures are in play.

Do not think that all off plan properties may be resold right away.

Are Cheap Off-Plan Apartments in Dubai a Good Choice?

Buying into the cheap off plan apartment market in Dubai may fit a certain budget but the lowest price shouldn’t be the only factor in the purchase.

Compare the issues of location, developer, unit size, payment options, service charges, construction progress, amenities and also that of potential demand.

A more economical property in a different location may not at all time give what the investor or end user wants.

What About the Highest ROI Off-Plan Property in Dubai?

There is no sure fire way to achieve the highest ROI from off plan properties in Dubai as investment returns fluctuate with market conditions.

Instead of reports that promise returns, look at:

• Purchase price
• Rental demand
• Expected rental income
• Service charges
• Location
• Supply and demand
• Developer reputation
• Future infrastructure
• Potential resale demand

Historian results do not predict future returns.

Final Thoughts

The simple steps to buy off plan properties Dubai buyers should follow are straightforward: Establish a budget, do research on locations, compare between projects, check out the developer and project, go over the payment plan, look at the SPA, complete the purchase registration, and always have your transaction records.

Whether you are a first time investor or a repeat investor looking to purchase off plan, due diligence is a must.

HMN provides a platform for buyers to research property options out there and which listings, locations, and property types are available. Also by teaming up with local experts in Dubai we may present projects which are more comparable and also go into the practical aspects of the purchase.

Before diving in, do your due diligence into the project and developer instead of jumping at promotional prices or expected returns.

Frequently Asked Questions

What is the process of buying an off-plan property in Dubai?

The process includes setting a budget, choosing a project which also determines the location, we do research on the developer, we check into project registration, we look at the payment plan and SPA, we sign the agreement and we finish out the registration process.

Is buying off-plan property in Dubai a good investment?

Off plan properties are a great investment play but there are no guarantees. As to which ones do well, look at the location, the developer, the purchase price, market conditions, payment terms, and what the demand will be in the future.

How do off-plan payment plans work in Dubai?

Payment plans which in turn break down the purchase price into installments. The timing and the percentage of each payment varies by developer and project, which is why it’s best for buyers to carefully go over the payment schedule.

Can I buy off-plan property from outside Dubai?

International buyers have the option to purchase in Dubai which is subject to meeting certain requirements. It is advised that buyers check into what identification, payment, registration, and representation issues they will need to address before going ahead.

Can I sell my off-plan property before completion?

An off plan property may be put up for transfer or resold in some cases, however there is no guarantee as to what will apply based on the Specific Property Agreement, developer, registration of the property, and what the rules are. It is best to check into this prior to planning a resale.

How does RERA protect off-plan buyers?

In Dubai’s regulatory environment developers must register projects and also open project specific escrow accounts for off plan developments. DLD reports that these accounts are put in place to regulate construction payments which in turn protects investor rights.