Real estate in Dubai: off-plan or ready-made housing

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If you are not planning to move into new housing in the coming months or urgently rent it out, it is more profitable to invest in off-plan projects in Dubai. Real estate, which is under construction, cost 20-30% less than ready-made apartments and villas. 

The main advantage of buying a property off-plan is the opportunity to buy it in installments with the most convenient payment plan. Most developers in Dubai offer payment schemes designed for several years. The initial payment is usually from 5 to 25%. In the future, you need to make small payments once a month or a quarter. The most significant amount is usually paid when renting housing. In some projects, this balance can be transferred within two-five years after completion of construction.

The cost of housing is growing in parallel with the building under construction: the closer the commissioning, the higher the cost becomes. Therefore, it is possible to resell the property profitably even before the completion of construction. To do this, the buyer must fulfill the conditions of the developer. 

What are the risks when buying housing under construction in the UAE 

What will happen to investments if the developer freezes the project or goes bankrupt? In the UAE, such a situation is unlikely today. The activities of UAE developers are strictly regulated at the legislative level and strict measures are taken to minimize the risks of investors. The implementation of residential real estate projects, the work of developers and real estate agents is controlled by the Dubai Land Department (DLD) and the Dubai Real Estate Market Regulatory Authority (RERA). The most important thing is to make a deal with a reliable developer.

How is the security of investments in off-plan housing

According to the legislation of Dubai, the funds that an investor invests in real estate under construction do not go directly to the developer, but to the target account. The developer can use it only when a certain stage of construction is reached. It allows you to secure investors’ money, even if the developer goes bankrupt. Dubai Land Department has ordered all registered developers to open escrow accounts. 

Before signing the purchase and sale agreement, make sure that you can clearly follow the approved payment plan. The laws of Dubai protect the interests of not only investors, but also developers. If the buyer cannot deposit funds in accordance with the plan, the developer has the right to terminate the contract and keep the penalty. When the project is completed by less than 60%, the developer can retain up to 25% of the property value. If the building is built at 60% or more, the penalty increases to 40%. 

So, to be sure of the safety of investments when buying real estate in Dubai at the construction stage, it is enough to make sure of several points:

  • the developer and his project are registered in RERA 
  • the developer has a good reputation
  • the investments are accumulated on the escrow account, which is indicated in the official resources of the Dubai Land Department

Our assistance in buying real estate in Dubai 

It is more reliable to hire an experienced specialist who is familiar with Dubai real estate market, knows all the legal subtleties and «pitfalls». The agent of Ax Capital will help you find a reliable developer, choose the most profitable project for investment and issue documents according to all the rules.

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