Been looking at news reports of Dubai’s red hot real estate market and glamorous new project launches and itching to get a piece of the action? You’re not alone. This year has seen the emirate’s off plan market rocket as the economy goes from strength to strength. For global investors, the thought of making a potentially highly lucrative purchase may be exciting but it can also feel overwhelming – especially if it’s your first time taking the plunge in Dubai. The trick is to get a thorough understanding of the buying process beforehand and work with experts along the way.

For total beginners, the term ‘off plan’ refers to properties that are purchased before they are constructed or completed, and they offer some unique advantages for investors. These include a lower initial cost – off plan property developments typically come with lower price tags compared to completed homes in the same area. This can allow investors to enter the market at a more affordable price point.

There’s also great potential for capital appreciation. As the property is developed, its market value may increase, yielding substantial profits for the investor when they decide to sell.

Payment flexibility is a big draw too – Dubai developers often offer flexible payment plans for off plan properties, which can include extended payment schedules, allowing investors to conveniently spread their payments over time. Developers also tend to have specific construction milestones that trigger payment releases, meaning investors can align their payments with the progress of the project, reducing the risk of paying for an unfinished property.

For those looking at Dubai rentals, investors can start generating income once the off plan property is completed and ready for occupancy. It’s worth noting that Dubai properties routinely offer rental yields of more than 7% – for comparison, New York is around 2.9%, London 2.7%, Singapore 2.5%, and Hong Kong 2.5% (according to Property Finder data).

However, investing in the off plan segment also comes with certain risks, such as delays in construction, changes in market conditions, and the possibility that the completed unit may not meet expectations. That’s why due diligence, thorough research, and working with reputable developers and real estate professionals are essential for a successful investment.

Here’s a step-by-step guide to buying off plan in Dubai.

Decide what you’re really looking for

Dubai’s real estate market currently offers a mind-boggling array of options, from luxury apartments in the city to swanky villas in suburban areas. Identifying your investment goals helps you narrow down your options and align your choices with your financial objectives. Whether you’re looking for rental income, capital appreciation, a vacation home, or a long-term investment, if you start by knowing your purpose your decision making will be much clearer.

Seek a reputable Property Consultant to work with

Dubai off plan property investments can involve complex legal and regulatory requirements, so (unless you like headaches) it’s important to find a reputable Property Consultant to guide you. They’ll also have a deep understanding of the market and can provide valuable insights into market conditions, trends, and potential risks, helping you make truly informed decisions.

Find the right property and secure your unit

Once you’ve identified a property you want to buy, you’ll typically sign a reservation agreement with the developer. This agreement may require a reservation fee, which can vary – your Property Consultant will be able to guide you on this step.
Sign the Sales & Purchase Agreement (SPA)

It’s at this point you’ll sign a Sales & Purchase Agreement (SPA). As in many other parts of the world, this is a legally binding contract that outlines the terms and conditions of the transaction. It’s a key document used when buying or selling property in Dubai and serves as a written record of the agreement between the buyer and seller.

Pay the installments

Following the agreed down payment, you will be required to pay regular installments based on the payment plan you selected. These installments can be monthly, quarterly, or semi-annually, depending on the developer’s terms.

And finally – property handover

Ater the final payment is made, and all legal requirements are fulfilled, the developer will ‘hand over’ the property to you (it will be fully inspected first to ensure everything is in good shape).

On this date, you become the legal owner of the property – Mabrouk!, as we say in Dubai.

Related questions…

Can I get a mortgage to purchase off plan property?

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.

Why invest in off plan property in Dubai?

The off plan market in Dubai offers higher returns on investment than the secondary market. The capital appreciation on off-plan properties is generally higher, especially if the property is purchased early in the development stage, plus there is also a wider variety of property types to choose from, with a range of different floorplans.

What are DLD charges in Dubai?

The DLD fee is 4% of the property purchase price, plus an AED 580 admin fee. Sometimes the developer will offer anywhere from 50% to 100% off on DLD fees, but the buyer has to pay the rest.