FEATURED OFF PLAN PROJECTS
Off-plan property is a property before a structure has been constructed upon it. Pre-constructions are usually marketed to real estate developers and to early adopters as developments so that the purchaser can secure flexible payment terms and cheaper prices. In the case where the buyer is buying directly from the developer at time of purchase the buyer usually pays a 10- 20% down payment and signs SPA (Sales Purchase Agreement). Depending on which developer you are purchasing from, the rest of payments made can and do vary, but are usually linked to construction. Property investors like to purchase property in this way in the hope of making substantial capital gains. This usually occurs because developers, who offer off-plan property for sale, often offer financial incentives to early adopters. Usually this comes in the form of a discount in response to the sale plan. Furthermore, there may be ample opportunity for capital growth in a rising property market like Dubai with a development cycle of typically 12–24 months. It is important to note that for off-plan property to be attractive, there must be a high level of other infrastructure in the immediate area such as a new university, express roads, etc. either already built or due to be built within the next few years.
In a rapidly rising housing market, buying off-plan property enables investors and home buyers to buy a property at a lower price than if they wait for construction of their chosen property to complete. In addition, buying off-plan may be the only way to get a property with a specific location or set of features as choice may be limited once construction finishes. Save Money –When an investor decides to buy off plan property it allows them to choose the best at the earliest and lowest possible price. It also allows buyers to choose the very best location in a particular development. This plays a big part in increasing the chances of gaining the maximum return on their investment. Sell Before Completion – Quite often investors can sell off their off-plan property contracts prior to projects completion. Assuming the market has performed well and project proved popular, owners can often sell at a considerable profit. Lower up Front Costs – Payment plans for off plan property can and do vary from developer to developer. With some developers only requiring a 10% down payment and the rest linked to constructions the outlay required initially is relatively low.
To help ensure an off plan project is completed, RERA has introduced numerous measures for end user protection, which must be met by the developer before they can even start marketing there project. One of these stipulates that the developer must own 100 per cent of the land belonging to the project. Along with this the developer must either make a down payment of 20 per cent as bank guarantee, deposit 20 per cent in escrow account, or complete 20 per cent construction before selling off plan projects. Together with the above measures, RERA requests contractors to submit a 10 per cent performance guarantee. Along with these measures, its imperative buyers do their own research and look into developers they are considering buying from. We recommend looking the developer’s track record as well as reputation. Law no. 8 The implementation of the new property law no. 8 has increased transparency in the DUBAI real estate industry and offers great security to end users and investors, regulating developers' professional conduct and ensuring late delivery and broken promises are things of the past. The law means that anyone purchasing an off-plan property in Dubai will make payments to Land Department- approved banks in Escrow, rather than directly to the developer. Developers will not be permitted to access the funds until certain agreed stages of construction have been completed and verified as conforming by a project consultant. This new law has increased the confidence of investors and has encouraged greater investment in Dubai.
In the midst of Dubai’s rapidly growing housing market, buying off plan properties remains one of the most affordable investment options and is also suitable for those looking to buy their first home around the inner city. As one of the most established real estate firms in the city, we offer the market expertise and experience necessary to help you find the ideal property for your lifestyle. For those on a restrictive budget looking to buy prime real estate in the inner city, an off plan property is the ideal solution. These are developments currently under construction and are offered at lower prices and on payment plans for those willing to buy before the property is finished. Investing in this way not only enables you to buy property at a significant discount, it also means you are in a better position to secure financing from lenders. We offer expert advice in buying off plan property. Whether you are looking for Off Plan property investment opportunity or your new home, we will provide consultancy services, which are guaranteed to help you find the most lucrative real estate on the local market such as the Emaar off plan projects, Dubai Properties off plan projects, Nakheel off plan projects, Meeras off plan Projects, Damac off plan Projects, Azizi off plan projects and off plan property investment opportunities with other developers in Dubai property Market. With more than a decade of experience in the market, we have a thorough understanding of the local Dubai property market’s movements and fluctuations. There are few other firms in Dubai who can provide the kind of in-depth advice and knowledge that we can. Our consultants have many years of experience with off plan projects and offplan investment opportunities in Dubai and can furnish you with advice on the risks and advantages involved in these types of Off plan property investments. Purchasing off-plan property remains a popular investment option in Dubai’s housing market. We have set out the key steps to be considered when purchasing off-plan property in Dubai. It should be noted that this is not meant to be an exhaustive list and independent legal advice should be sought in respect of not only the acquisition process, but also in respect of verifying and negotiating the sale documents. Developer Due Diligence Verify that the developer is registered with the Dubai Land Department (DLD) and is authorized to sell off-plan property – this can be verified in the “Approved Developers” section of the Dubai Land Department website Confirm the track record and reputation of the developer in terms of project delivery on the basis of - for example, previously completed projects Examine any press coverage or publicly known information about the developer’s current status – for example, is it involved in any dispute regarding the delivery of a project? Project Due Diligence
- Confirm the project is located in a designated freehold area granting ownership rights to non-UAE/GCC nationals – these areas are set out in Regulation No. 3 of 2006 Determining Areas for Ownership by Non-UAE Nationals of Real Property in the Emirate of Dubai, as amended
- Verify that the project is registered with the DLD for off-plan sales and current construction status – this can be verified in the “Project Status Tracking Service” section of the Dubai Land Department website
- Confirm the Escrow account details provided to you by the developer are the project’s official Escrow account details registered with the DLD – this can be verified in the “Approved Developers” section of the Dubai Land Department website
- Assess the location of the project in terms of convenience and accessibility – for example, if the project is located in the suburbs of Dubai and has little else around it, this may impact the relevant authority’s ability to deliver hard infrastructure.
- Title and Use Due Diligence Verify that the developer/seller (in the event of an acquisition in the secondary market) is the registered owner of the property by requesting and viewing the title deed to the property Confirm what use/land restrictions, if any, exist in relation to the property – for example, any encumbrances, restrictions on renting/on sale, or rules and regulations governing the property by way of the master community declaration Verify what rights are being granted in relation to the use of the property, for example, the permitted use of the plot (retail/residential), the allocated gross floor area of the plot and/or the capacity of utility services and whether these are sufficient for the purpose for which the purchaser is acquiring the property It should be kept in mind that ownership of a property is confirmed upon issuance of the title deed – prior to that, the purchaser will only have a contractual right
- Sale and Purchase Agreement Review what rights will be granted to the purchaser and what obligations the purchaser will be required to fulfill Confirm the construction obligations of the developer, specifically, the time frame /specifications for delivery and defect rectification obligations Confirm the forum for any disputes between the purchaser and the developer in relation to the property has been designated as “Dubai, United Arab Emirates” Review the rules and regulations in relation to the on-going management of the property and the master community in which it is located – for example, there will normally be an obligation on the purchaser to pay service charges to the developer/master developer.
- Registration and DLD Fees DLD registration fees currently assessed at 4% of the purchase price, although will vary in the event that the right granted is not an ownership right in perpetuity (freehold interest) Until the property is completed, it is mandatory to register the property on the Interim Property Register (Oqood) and the purchaser should ensure that the developer provides them with the Oqood certificate Once the property is completed and the property is registered on the Real Property Register, the title deed which will be issued should set out the particulars of the purchased property and the sale transaction It should be kept in mind that the valuation of the land as determined by the DLD may vary from the purchase price of the property provided by the developer, which in turn may result in the purchaser having to pay the difference as part of the registration process