Those new to the Dubai property market and looking to invest tend to go straight to one of the city's big property developers. By buying property directly from a developer, off-plan, in other words, before the building starts construction, the hope is to save time finding a good investment. You also get to own a brand new apartment or villa in a few years to come - and who doesn't like something that is brand new?
Property developers have great renders and work with aggressive real estate agents to make any upcoming property project look enticing.
However, off-plan properties come with a long list of potential pitfalls that newbies to the Dubai property market are especially susceptible to. Let's cover the pros and cons of buying property off-plan in Dubai:
Pros
You Get to Choose that Perfect Apartment You Cannot Find in the Secondary Market
Every building has apartments with good and bad views, efficient and inefficient floor plans. By keeping track of new property launches from developers and being among the first to arrive when a new launch is happening, you have the best chance to secure your preferred apartment in the building, or villa location in a suburban subdivision. Investors like to keep the most attractive units, and that's why you rarely find them in the secondary market available for resale.
Everything Is New
Property Flipping for a Quick Profit
Cons
Frequent Delays
Most property developers, including the big ones, have delivered properties with severe, several-year-long delays. Imagine buying a property off-plan in 2014, expecting it to get finished in 2018, and waiting until 2023 for handover. That's not unusual. In some cases you may qualify for compensation from the developer, compensation, however, often falls short of the losses you will incur. We have analyzed the 20 largest property developers in detail on quality, delays, and value retention. Contact us for insights.
Overpriced Launch Offers
Uncertain Quality
Risk of Non-Delivery (Total Loss)
Unproven Returns
Limited Access to Mortgages
There are many more advantages and disadvantages of buying both off-plan or ready in the secondary market. We discuss all of these and much more in our "Property Strategy" coaching.
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