If you are interested in purchasing a share of Dubai's continuously growing real estate portfolio adorned with architectural wonders and future projects, off-plan apartments are a great option. Nevertheless, investing in the off-plan market involves thorough research and knowledge-based decision-making.
Thus, we have organized this entire guide to walk you through the steps of buying off-plan apartments in Dubai, its benefits, and the additional costs. Let's begin.
What are Off-Plan Apartments?
Off-plan apartments refer to apartments that one buys directly from the developer on the basis of 3D models, brochures, and architectural drawings before construction is finished.
Why Investing in Them in Dubai is a Smart Move
Off-plan deals accounted for 63% of all property sales in Dubai in 2024, up from 54% in 2023. That's because it provides several benefits, such as:
- Lower prices compared to ready-to-move-in properties (including pre-launch discounts)
- High potential for significant capital gains by the property's completion
- Attractive installment-based payment plans
- Certain design-related customization options as per the buyer's taste
Step-by-Step Process of Buying Off-Plan Apartments in Dubai
Before starting the process of buying off-plan apartments in Dubai, you need to plan your budget. After that, you can go through the following steps.
Step 1: Examine the Market
When purchasing off-plan apartments in Dubai, you must start with market analysis. Study the existing real estate market trends, identify trending locations such as Downtown Dubai, Dubai Creek Harbor, Dubai Marina, and Jumeirah Village Circle, and take decisions accordingly on these parameters.
Also, consider proximity to prime amenities, transportation centers, and upcoming infrastructure additions. Cross-compare rental yields, median home prices, and forecasted growth rates between different neighborhoods to keep up with the market realities and make smart choices.
Step 2: Select a Trustworthy Developer
Another essential parameter worth keeping in mind while purchasing off-plan apartments in Dubai is seeking out developers who have demonstrated their excellence within the market via prompt project delivery and top-of-the-line quality. Assess their financial stability and testimonials.
Step 3: Understand the Payment Schedule
Typically, developers provide reasonable payment options, beginning with a small down payment, followed by regular installments, and final payment upon completion. Certain developers also accept a percentage of the cost after the buyer moves in.
Verify that the payment schedule fits your investing objectives and financial situation. Check with banks that offer loan-on-mortgage options. Review the interest rates, tenure, conditions, and eligibility criteria.
Consider some extra costs, including:
- Dubai Land Department (DLD) charge (4% of the property price plus an AED 40 admin charge)
- Trustee registration fee (AED 2000 for properties of value below AED 500,000; AED 4000 for properties of value AED 500,000 and above)
- Dubai Electricity and Water Authority (DEWA) registration fee (as per the apartment's size and category)
Step 4: Check RERA Approval
Verify the project's RERA (Real Estate Regulatory Authority) approval to safeguard your financial safety and abide by legal standards.
Step 5: Examine the Sales and Purchase Agreement (SPA)
You need to know the Sales and Purchase Agreement (SPA). It is a binding contract stating your investment terms and conditions. It contains information regarding your buyer rights, the developer's obligations, the project's completion date, payment plan, refund procedures, force majeure provisions, and delay penalties. Reviewing the SPA with legal counsel is advisable to ensure your interests are properly safeguarded.
Step 6: Register with the Dubai Land Department (DLD)
Register the property at the Dubai Land Department (DLD) to lawfully transfer ownership into your name and in order for your investment to be accepted and safeguarded by the laws of Dubai.
Step 7: Pay Initial Deposit
Pay the initial deposit, often 10-20% of the apartment price, to an escrow account to guarantee that the money is utilized for project completion.
Step 8: Track the Construction Progress
Take the initiative to visit the site, request photos, and discuss any issues with the developer immediately to reduce potential inconsistencies in the final delivery.
Step 9: Plan for Handover and Final Payment
Make the last payment after the property's completion. Prior to the final acceptance signing, ensure that the developer has undertaken snagging and defect inspections. Ask the developer to provide the relevant reports to maintain records.
Conclusion
If you have always dreamt of buying a piece of real estate in Dubai, opting for off-plan apartments can be a great option. It lets you own a brand-new house in a desirable location at lower prices than ready-to-move apartments. However, before you select a project, you must fully understand the procedure, the developer's background, the required documents, the financing options, and your rights as a buyer.