Dubai is witnessing a steadfast increase in interest from international and local investors within the city’s real estate market. Transactions are on the rise while investors are divided with the choice between off-plan and ready-to-move properties, the question prevails – What is the better choice of investment?
“Off-plan properties typically offer lower initial prices and the potential for higher returns upon completion,” Jana Zapletalova, Associate Director, haus & haus Real Estate said in an exclusive interview with Arabian Business.
However, she also presented the advantage of ready-to-move properties stating that, “Ready properties offer the benefit of ready to move in with possibility up to 80 percent mortgage.”
In the first quarter of this year, off-plan property sales witnessed staggering growth with over 36,000 recorded transactions, according to Property Finder’s Market Watch digest report for Q1 2024.
Cherif Sleiman, Chief Revenue Officer at Property Finder said, “2024 has opened up to an interesting and promising phase of growth within our sector.”
According to D&B properties, investors should consider off-plan properties to maximise returns due to the growth in the sector that was attributed to increased investor confidence, the last impact of Expo 2020 and limited supply of prime properties.
Key differences between Dubai off-plan and ready-to-move properties
Zapletalova believes that having the right broker and agent is crucial to make the right investment decision, she lists the following differences between both property types:
- Off-plan offers lower initial prices and the potential for higher returns
- Attractive payment plans offered by developers
- Possibility to choose the exact unit and view
- Brand new quality construction with the latest modern facilities and technology
- Ready properties offer the benefit of ready to move in with possibility up to 80 percent mortgage
However, experts addressed the risks associated with investing in off-plan properties versus ready-to-move, “Investing in off-plan can have certain risks such as potential construction delay and changes in market conditions,” Zapletalova said.
According to property platform Bayut, there are several risk factors associated with buying off-plan properties:
- Delayed completion or cancellation of the project.
- Changing market conditions.
- Quality might be different from brochure, image expectations.
- Off-plan properties cannot be sold until a certain percentage of the sale price is paid off.
- No immediate returns.
Speaking about the advantages, Property Finder, states that off-plan real estate “can be a great investment option as it offers many benefits,” and lists several advantages such as latest designs, lower market price, developer promotions and flexible payment plans, higher returns on investment and low refurbishment costs.
Zapletalova highlighted the “big advantage” in terms of pricing and capital appreciation when it comes to off-plan versus ready-to-move properties. She also added the availability of a flexible payment plans with lower initial deposits.
“Once the whole community around the property is developed there is an even higher potential for capital growth, ready developments have often seen this capital growth occur up to and during handover, upon which more mortgage buyer end users tend to enter the community,” she said in favour of off-plan properties.
Last month, Arabian Business reported on the best selling off-plan plan real estate projects in Dubai. Here are the top primary property developments in the city:
- Burj Binghatti Jacob & Co Residences in Business Bay
- JVC District 10 in Jumeirah Village Circle
- Verdana II in Dubai Investment Park (DIP)
- Alaya in Tilal Al Ghaf
- Al Furjan West in Al Furjan
- Villanova in Dubailand
Zapletalova emphasises the importance of choosing brokerage and agents “carefully” and with a client-centric approach. Overall, the choice between off-plan and ready-to-move properties transcends mere financial considerations, embodying a strategic blend of risk appetite, market dynamics, and long-term vision.
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