Buying a property off plan in Dubai can swing both ways; it can either be a fantastic and profitable decision, or a bit of a risk. Although naturally there are pros and cons to buying a property off plan, with qualified, expert real estate agents on hand to help every step of the way, it can be a solid investment to make.
• You generally pay less
The general rule is that you will pay less for the property, as you are buying something that won’t be used or lived in for a number of years. Most people bank on the fact that their property will be worth a lot more than they paid for it by the time it is completed.
• Guarantee of goods
One of the best things about buying off plan is the knowledge that every single piece of the property is brand new. This means that all of the kitchen, bathroom and general living appliances will come with guarantees, including everything from the fridge and the dishwasher to the boiler and the AC units.
• You only pay when it’s finished
When you buy a property off plan, you give an initial deposit and the rest of the money is due when the property is completed. This is perfect for those who are looking to save more money or need more time to get the money together to free up other assets.
• There’s a chance you can lose money
As you will be agreeing to pay the current market rate when you sign up for the off plan property, this may work against you if there is a crash in the market. Do lots of research on predictions for the property market ahead of time, so you aren’t caught out by any nasty surprises.
• Rising interest rates
If you are interested in a variable mortgage, you will need to account for the fact that the interest rate of your mortgage may be very different when you actually move into the property. If the off plan takes 5 or so years to complete, the potential difference in interest rate needs to be factored into your decision.
• Developer Bankruptcy
One of the biggest problems people face, or at least a worry they have, is that the real estate developer will go bankrupt before the project is finished and they will be left with nothing. Unfortunately this happened many times during the 2007/2008 financial crises. The best way to avoid this is to only invest in development by real estate companies that are well known and reputable in the market. If the company is a real estate giant, the chance of them going bankrupt during the property development is reduced, compared to one-time developers.
Whether you decide that investing in an off plan property in Dubai is the way for you or not, make sure you consult your real estate agent and investment adviser ahead of time to discuss the best options to suit your requirements. If you would like to sit down with one of Gr8 Homes property consultants and look through off-plan opportunities, contact the team on +971 52 849 8657 to make an appointment.