Buying “off-plan” is when you sign a contract to buy a unit that is yet to be built, or is in the process of being built. Without having a completed property to base your decision on, as a purchaser you are relying on renders, floorplans and virtual tours to help you decide on whether this unit is the right one for you.
While the process of purchasing off-plan can vary from one developer or project to the next, it is gaining popularity with investors and people looking to secure themselves a future home.
With the recent updates to the citizenship laws and the introduction of retirement visas, global investors are now able to retire in the UAE a lot more easily. This has opened up a whole new series of options for investors, and ties in perfectly with the benefits of purchasing off-plan.
To gain a deeper insight into the key benefits associated with purchasing a property off-plan, continue reading the below points.
Off-plan properties present great investment opportunities for savvy buyers, who are looking for lower initial outlays and greater financial returns in the long run. Off-plan units are often sold below the market-value (BMV) price, offering investors a chance to sell it at a much higher price once the unit is completed. An off-plan property will also rise in value naturally as the project is completed, this is highly rewarding for an investor who purchases a unit in the early stages of the off-plan process, before turning a healthy profit on the secondary market.
When you are purchasing an off-plan unit, you have access to the entire inventory of a building. This presents you with the best chance to choose the exact unit type you want. By the time a project is fully completed, a high proportion of the best units will have already been sold to keen investors. Therefore if you stall your decision making, you are severely limiting your chance to buy the prime units in a new project at great rates.
Off-plan properties usually offer very flexible and friendly payment plans for purchasers. Starting with a low reservation fee for a unit (typically around 5-10%). This is done to book, or reserve the unit in your name as soon as you decide upon the one you want. There will typically be another similar size fee due within the following 30 days as you sign your SPA (Sales Purchase Agreement) with the developer. In the end, the vast majority of the payment is not due until completion, which presents a great chance for investors to afford themselves a little more time, in order to save up the full unit costs, or at least limit the duration of higher loan repayments.
One of the most popular reasons for buying a unit off-plan is that you are receiving a brand new unit, that has never been lived in previously. This allows you to lay it out and design it as you please post completion. It also vastly reduces the wear and tear associated with a building or a unit as it gets older and ultimately leads to issues down the line. You will also generally receive a maintenance guarantee from a developer for 12 months postdate of building handover, in case any maintenance issues arise in the building during that period – this is a great extra value add to any off-plan purchase, which you won’t get on the secondary market.
New projects built by trusted developers are completed to the highest standards, with an array of modern features that ultimately lead to big savings in the long run. The application of energy efficient building practices, environmentally friendly features, and new technological innovations all allow for increased savings in the years post handover. Buying a brand new home will also help to avoid additional costs related to refurbishment and repairs that could be needed if buying a secondary market property that may not have well looked after by a previous owner.
Georges joined Select Group as Commercial Director in 2020. He has over 18 years’ experience in destination management and expert knowledge across an array of industries including hospitality, tourism and MICE. He has a deep understanding of the GCC, and the buying behavior of the international visitors to the region.