10 tips for purchasing off plan property in Dubai

The emirate’s off plan property market is rocketing, but before you make a move here’s a step-by-step guide for success.

If you’ve been thinking seriously about buying off plan property in Dubai you’re not alone – in 2022, property sales in this segment experienced massive growth, accounting for 55% of overall sales according to listings site Property Finder – and this year is seeing even greater demand.

Dubai’s thriving off plan market is being driven in part by the current global landscape of high-interest rates and rising mortgage rates, plus off-plan properties in general are more investor friendly due to benefits such as price appreciation, flexible payment plans, and attractive offers from developers.

Then there’s the appeal of sunny Dubai itself.

Now recognised as a global hub for business and tourism, the emirate is seeing soaring demand for both residential and commercial properties. And as the city's population grows and more businesses establish a presence, this demand will only increase.

As a buyer, what’s not to love?

But before you dive into the lucrative world of Dubai off plan, here are 10 tips for success from the haus experts.

1. Review your budget

The first order of business is to review your budget, financial stability and whether you can afford the property over the course of its development. Market conditions can change, so make sure you're prepared for potential fluctuations.

2. Understand your reasons for buying (investment vs end user)

Have you decided what your main reason for buying is? Perhaps you’re looking for a great investment that will give you profit through capital appreciation and rental income. Or maybe you fancy having a gorgeous Dubai home for personal holiday use or long-term residency. Understanding your reason for buying will help a property consultant guide you towards a purchase that ticks the right boxes.

3. Conduct due diligence

Doing due diligence will ensure that you are making a well-informed and secure investment. Off-plan properties offer potential benefits such as lower prices and customisation options, but they also carry a few unique risks. Make sure you understand the project details, including the floor plans, specifications, amenities, and any associated fees. Confirm that the promised features match your expectations and that there are no hidden costs.

4. Talk to a reputable real estate consultant

In a buzzing market like Dubai’s, getting the help of an experienced and reputable real estate consultant will make all the difference. Not only will they have knowledge of the best off plan properties on the market – often including ones that aren’t even listed yet – but they’ll also be able to steer you away from any pitfalls. Dubai, like all property markets, has its unique rules and regulations so getting someone to take care of the admin for you can be a life saver.

5. Review the project

Take some time to properly review any off plan projects you’re interested in from all angles. Look at the architectural plans, layout, and specifications of the property to ensure that they meet your expectations in terms of size, layout, finishes, and features. The developer should have plenty of materials available (e.g., brochures) and your property consultant can deal with any queries you may have.

6. Look at the location

We all know that rule 1 about buying real estate is ‘location, location, location’ – but it’s still a point worth coming back to. Research the areas you’re looking at thoroughly and consider factors like proximity to amenities, transportation, schools, and potential for future growth in value. If you happen to be physically in Dubai, then nothing beats exploring on foot (if feasible) to get a sense of the area’s vibe and amenities.

7. Check the developer’s reputation

Investigating the reputation and track record of a developer could save you heartache later. Look into the success of their past projects, financial stability, and (crucially) reviews from previous buyers – especially things like quality of finishing. Reputable, well-established developers are more likely to deliver as promised and make the whole process stress free.

8. Determine ROI / capital appreciation

If you’re considering buying a Dubai off plan property as an investment, then it’s important to find out ROI – the income it will generate relative to the amount of money invested. You should also determine capital appreciation. While rental income provides a steady cash flow, capital appreciation can deliver substantial returns, often outpacing the rental income. Buying a property in an area with strong growth potential can see significant increases in property value, resulting in higher overall returns. That’s why talking to an expert really helps (refer to point 4).

9. Study payment plans

Another important tip is to look at the different payment plans available. When a Dubai developer announces a new project, potential buyers can reserve a unit by making an initial reservation fee –usually a small percentage of the property's total price. The remaining cost of the property is divided into a series of installments spread over the construction period which are structured to match specific milestones in the project's development. These payment plans can be highly attractive – you just need to shop around.

10. Read contracts thoroughly

OK, this might sound obvious but if you’re new to investing in Dubai there will be legal aspects you’ve never come across so carefully review the sales contract and terms of purchase. Understand the payment schedule, completion date, and ensure that the contract includes provisions that protect your interests in case of project delays, changes, or cancellations.

If all this has got you raring to chat to one of our Off Plan Consultants (good stuff), here are answers to a few FAQs before you start your journey.

Can I negotiate the price of an off plan property?

When it comes to negotiating there are no special rules around buying off plan so it's always worth trying. It’s best to get in early and make an offer as soon as a property is listed for sale.

Can I get a mortgage on an off plan property in Dubai?

Yes, you can take out a mortgage to buy an off plan property. Although, you should note that the maximum loan-to-value (LTV) ratio for mortgages is 50%. Additionally, some banks have particular requirements regarding the types of properties and projects that are eligible.

Can I sell an off plan property before completion?

One strategy adopted by some investors is to purchase an off plan property and then sell it on before settlement even occurs. This option is entirely legal and can have specific advantages, but it's important that you know the correct process for doing so before you decide on this investment approach.

What is a DLD waiver in Dubai?

A DLD waiver refers to a waiver of Dubai Land Department (DLD) registration fees. This is a common offer from developers. Usually, the DLD fee is 4% of property purchase price, plus an AED 580 admin fee.