The aspiration to own a home in Dubai has seen a remarkable jump in the post-pandemic era, driving property demand that has outpaced supply in the emirate.

To meet this phenomenal demand from local and foreign investors, off-plan projects are being aggressively launched and show no signs of slowing down. However, investing in off-plan properties requires careful consideration and diligent research to secure the property and money.

Developer's reputation

"The number one factor is the developer's reputation," said Samer Chehab, Founder & CEO, PropertyGuru.ae. "Ensure they have a history of reliability and timely project completion. As an investor, you need to check if they have other completed projects in the market, their ongoing projects, and the post-ownership experience of investors."

Developers and projects must be registered with the land department in the emirate investor's buying from.

Misbah Baig, who lived in the UAE for 20 years, said, "It is paramount to work with a reputable developer, thoroughly assessing their track record. Additionally, it's advisable to consult multiple real estate agents with extensive experience in Dubai." The 35-year-old Indian investor said he wouldn’t buy any future off-plan property without these three considerations.

Investors frequently rely on real estate brokers when hunting for the perfect home. Selecting the right agent can either make or break your dream.

Evaluate financing options carefully

Off-plan properties attract investors due to their buyer-centric and affordable payment plans.

"Developers now offer extended payment periods, up to 3-4 years post-handover, enabling investors to take possession, lease out the property, and generate rental income to recoup part of the purchase value. This trend significantly boosts the demand for off-plan properties," said Fouad.

"How you will finance the purchase and whether it fits your budget is crucial. It's important to compare various payment plans and find a suitable option. Investors should understand the implications of being late for a payment and ensure that they have factored the possibility of construction delays into their financial plans."

Investigate the area’s financial potential, focusing on rental yields and growth prospects to determine the long-term value of your investment.

PropertyGuru.ae spokesperson, Samer, suggested, "Buyers should always insure their loan so that they have some protection if anything goes wrong with their careers, thereby limiting their ability to pay."

Many buyers overlook the legal and financial risks. It’s crucial that they review all legal agreements and also plan for additional fees from valuations to registrations.

Delayed project

Potential buyers must consider the projected completion date and current market conditions to ensure they align with their investment horizon.

From her experience, Clementina spoke about the delays she faced, "We own two more units in Golf Views Seven City by Seven Tides located in Jumeirah Lakes Towers. This project has experienced significant delays — initially launched in 2018, construction halted at one point and later re-launched in 2020. Originally slated for handover in 2023, the timeline has been extended by another two years; we are hopeful it will be completed by the end of 2025.

"Our investment followed a payment plan of 40 per cent during construction, 10 per cent at handover, and the remaining 40 per cent spread over two years post-handover. The first unit was acquired directly from the developer in 2021, while the second unit was purchased from the secondary market just last year."

Monitor construction

Handover delays and a construction schedule shift are major concerns in off-plan projects. "That's why constant communication with the developer is crucial," Samer said.

"Often, buyers don’t keep track of the progress the developer is making. While delays happen often, we always recommend that investors stay involved regularly through site visits and communication with the developer," the General Manager of Huspy said.

It's crucial to note that occasionally, the final quality of the property may not meet the promised standards, falling short of expectations. Therefore, it's imperative to remain vigilant and monitor the progress consistently.

While buying off-plan, investors see rendered images and plans on the drawing board or a show home. "There is a risk that you don’t know what the ready unit will look and feel like, with homebuyers sometimes taking possession of lower quality homes," Fouad pointed out.