Dubai is offering many reasons for investors to consider venturing to the Dubai real estate sector. One in particular is the high return on investment as the market continues to mature. The city’s population increases each year thus, there will be a rent demand.
Since the announcement of Expo 2020 in Dubai, developers are offering various off-plan properties with unique styles and concept. The rental demand will be high hence, an opportunity for landlords to increase rents.
Around 10,759 off-plan units were sold in Dubai for the first seven months of 2018, a 25 per cent decline from last year’s 14,330 deals during the same period, according to GCP-Reidin. On the ready property side, 7,205 ready apartments changed hands in the January to July 2018 period across Dubai, down six per cent from the 7,649 sold last year. July 2017 showed the highest number of off-plan apartment transactions ever recorded since Dubai Land Department started sharing Oqood data with the public in 2012.
But what are the pros and cons of an off-plan property versus a ready property?
Buying an off plan property will secure you a lower price
Developers usually offer between 10 to 30 per cent lower prices for off-plan and under-construction properties. The most common issue with buying off plan property is that there are chances that your project might get delayed.
However, in Dubai, there are a number of laws and regulations put in place by the government to secure buyer protection in off-plan properties and the project is stringently monitored by the authorities.
Higher return with the market growth on off-plan developments
An investor can profit of anywhere from 20% to 40%, compared to ready properties. So off plan investments seems more lucrative for all those investors who are looking for a better and higher return with the market growth and prefer to wait for their investment.
No waiting time for ready to move-in properties
The main downside of a ready property is the cost as developers charge a higher price when the property is closer to completion. Buying into prime areas such as Downtown, Dubai Marina and The Palm Jumeirah can come at a hefty price.
One point surely does stand out, there is always an extra incentive or discount offered for off-plan buyers than those available for ready properties and developers are making the most of this. Dubai is still a new city and there is a lot of infrastructure which needs to be planned, however, once completed it would bring more value to the property you are buying.