Almost nine out of ten investors that intend to purchase property in the GCC say they will buy off-plan, according to findings from the ArabianBusiness.com Property Survey 2008.
Data from the annual survey indicates that 75.49% of potential real estate buyers intend to purchase off-plan directly from the developer, while a further 10.89% will buy off-plan on the secondary market.
Only 13.62% of prospective buyers said they intend to buy property that has already been built.
Purchasing off-plan gives buyers a higher potential return on their investment as they do not have to pay the whole purchase price up-front and off-plan properties cost less than ready properties.
Investment is the primary reason people buy property in the GCC, with almost three-quarters of respondents to the survey stating investment as their main driver.
Purchasing off-plan, especially on the secondary market, can also expose buyers to risks such as delays to the project they have invested in, a downturn in the market that leaves them paying more than their property is worth, or rising costs forcing developers to cancel projects completely.
Results from the survey come amidst news that soaring construction costs have forced developers in Dubai, the region's hottest real estate market, to buy back properties from investors as projects become financially impossible to complete.
The survey revealed that potential real estate buyers in the UAE are among the most likely to buy off-plan, with a total of 87.92% of respondents saying they would buy either straight from the developer on the secondary market.
Of the total respondents that plan to purchase property in the UAE, only 12.08% plan to buy property that is already built
The survey showed real estate investors in Egypt and Kuwait were the most likely to buy completed projects with 40% and 37.5% of buyers in each respective country saying they would not buy off-plan.
Potential buyers from India (90.12%), the UK (84.92%) and Canada (96.77%) were found to be among the most likely to purchase off-plan real estate in the region, the survey showed.
Investors from Kuwait and Saudi Arabia were among the most likely to go for a completed project, but even so, 65.52% and 58.3% of respondents from the two Gulf countries respectively indicated they still intend to buy off-plan.