For the last two years, off-plan has been a way for investors and end-users alike to make great savings on property.
Obviously, the future owner has to be patient as it may take up to 5 years before he or she can set foot in his/her new property. However there are many benefits to off-plan properties. The main one being the monetary aspect.
Developers have offered over the last 24 months several projects in prime as well as upcoming locations in Dubai for a fraction of the price of similar ready properties. Also the new trend has been to give post handover payment plans whereas buyers have the option to continue paying after completion and handover of the property.
This is particularly great for investors as this means they can use the rent to repay the property. And this is why off-plan has been so popular to the point we have seen in some months the sell of off plan projects surpassing ready properties (before 2015, off-plan used to represent 30% of all sales transactions)
Now this has had an adverse effect on the secondary market especially in communities where there is a mix of ready projects and upcoming developments such as Jumeirah Village Circle, Sports City, Business Bay and Meydan. In those areas, owners willing to sell their properties have faced some difficulties with fewer inquiries or offers way below asking price.
The combination of market correction and the increasing volume of off-plan units has made the supply much higher than the demand making Dubai a buyer's market. The next 18 months will be key to identify the next trend as more and more off-plan projects will be handed over.
As Engel & Völkers, we are working with the main developers in Dubai such as Nakheel, Emaar, Dubai Properties and Dubai South. Should you be interested in off-plan projects, don't hesitate to contact me