06 April 2023, Construction Business News
Over the years, Dubai’s strengthening economy, tax-free policies and investment-friendly regulations have positioned it as an ideal destination for real estate investors. Owning property has been a longstanding goal for many expatriates in Dubai, and the popularity of off-plan properties has made it more achievable due to their affordability, flexibility, and potential for high returns.
Growth of off-plan properties
Off-plan sales have had exponential growth, accounting for nearly 55 per cent of overall sales volume in 2022 (up from 44 per cent the previous year) and 56 per cent of total sales value at AED 143 billion (up from 41 per cent in 2021). High-end real estate in Dubai is expected to continue this increase, as the market is expected to continue to be driven by burgeoning international demand.
With a booming economy, a strong political infrastructure, and an exceptional ROI on real estate investments, Dubai is a haven for all seeking to invest in the real estate market. Off-plan property investments are increasingly popular, especially among local buyers. Both domestic and foreign purchasers have significantly increased their demand for real estate in Dubai since 2002, following freehold residences becoming available for expatriates.
Investors purchasing an off-plan property receive a unit at the most affordable pricing. Additionally, it gives investors the opportunity to choose the best units within the development, increasing the likelihood that they will receive the highest ROI. The significantly cheaper cost versus global cities like London, Paris, Hong Kong, is one of the main advantages of selecting off-plan apartments for sale in Dubai. Since off-plan properties are still in the development stage, anyone can become an investor by contributing a relatively smaller sum of money.
However, developers frequently provide appealing investment opportunities for off-plan homes together with manageable payment plans. Using these options, purchasing properties before they are fully constructed is a little more cost-effective and practical than doing so with developments that are entirely complete. You can leverage these reduced prices regardless of your level of knowledge or inexperience.
The Real Estate Regulatory Authority (RERA) of Dubai established a series of regulations to protect buyers from project cancellations and delays. Off-plan purchasers are shielded from developers who break their contractual obligations, through a law established in 2017. Investors can buy off-plan buildings with total confidence as payments are only deposited into regulated escrow accounts, which developers can only access as they fulfil construction milestones.
P.N.C. Menon, Founder and Chairman of Sobha Group, said: “Real estate, being a tangible asset, is one of the safest investments in the world. With the increasing interest in real estate investments, investors are gaining confidence in off-plan properties. Off-plan properties have the potential to generate higher rates of return, as these projects allow investors an opportunity to benefit before they are constructed and delivered. These returns are typically higher than what can be obtained by investing in pre-constructed properties.”
Off-plan homes might be a good alternative for people looking to invest in Dubai’s real estate market. Yet, it’s important to carry out a thorough research and consider all options before making an investment decision.