While ready properties are preferred by many in Dubai, off-plan units have also witnessed an upward trend. The reason why many people now opt for properties in the primary market is that they are available at comparatively low rates and come with flexible payment plans.
Take for example, properties available in waterfront projects in Dubai are insanely expensive. However, if you’re opting for off-plan properties, you can get them at rates well within your budget. The reason? These properties are under-developed.
Suffice it to say, there has been a noted growth in the transactions of off-plan properties in Dubai. However, some people, particularly new entrants in the market, are still hesitant when it comes to selecting them and exploring the potential they offer due to misconceptions spread about them.
In this article, we have discussed some of these misconceptions and debunked them. Continue reading to know more!
1. Off-Plan Projects are Prone to Cancellation
While it’s true that off-plan projects get cancelled, this, however, doesn’t happen too often. And it is important to know what a project just can’t be cancelled out of the blue. There’s a whole process that leads to the project being termed as cancelled.
Even after the project is cancelled, the developer can appeal against this decision. RERA, then, takes various factors into account to roll out the final verdict.
Many believe that once the project has gotten cancelled, the buyer/investor faces huge losses. This, again, is a misconception. If you have purchased a unit in such a project, you will get your invested amount back. However, there’s only one condition. The project must have an escrow account.
When a project gets cancelled, RERA appoints an auditor who checks the escrow account details and also has the responsibility of distributing the available funds. If the account doesn’t contain sufficient funds, it’s the developer who has to make arrangements for the remaining funds. And they have to do it within 60 days.
2. Off-Plan Properties Are Suitable for Investors Only
It’s a common perception that off-plan investments only prove to be beneficial for investors. This, however, is nothing more than a misconception. Surely, off-plan properties offer advantages to investors, but they are equally suitable for end-users as well. For example, if you are looking for a home in Dubai to settle with your family, you can select an off-plan property and get it at lower rates as compared to the market. Once the project has completed, you can shift there. Or you can sell the unit before it’s completed and buy a ready property. The choices are abundant.
3. Off-Plan Investment Can Take a Long Time to Product ROI
The fact that these projects are under-development has given rise to this misconception. However, bear in mind that it’s not always that off-plan properties will take years before they produce substantial ROI for you. In some cases, you will start getting offers for your purchased unit before it is even completed. Investors can directly get in touch with you if they feel your purchased units hold great prospects for them. And the best part here is that it’s you who will have the upper hand in this negotiation.
This way, you can sell it off at higher rates and earn ROI sooner than expected. The condition here is the project must be helmed by a renowned developer and located in a prominent location. For example, Stella Maris Tower perfectly fits this description. This 53-storey building occupies a prime location in Dubai Marina and is slated to be the last waterfront development in this locality. This, along with numerous other attractive features, has helped it gain tremendous popularity, despite it being in the development stage.
A Final Word
In a nutshell, buying an off-plan property comes with many perks. So, don’t let these misconceptions demotivate you. Having said that, the key lies in selecting the right project. Take your time and find a development that comes with maximum potential. Pay attention to its location, amenities and facilities, and types of properties. Also, take into account the nearby developments. A project that’s located amidst major developments and attractions tends to have better potential.
By taking all these factors into consideration, you will be able to secure a unit that offers a high ROI.