Frequently Asked Questions
Off Plan Properties in Abu Dhabi and Dubai
An off-plan property is an unconstructed property purchased directly from a developer. It’s a property that is yet to be built or in some cases is in the early stages of being built.
- Lower up Front Costs – Payment plans for off plan property can and do vary from developer to developer. With some developers only requiring a 5% down payment and the rest linked to constructions the outlay required is relatively low.
- Save Money – Buying an Off plan property allows investors to get a purchase price at the earliest and lowest possible price. It also allows buyers to choose the very best apartments in a particular development. This plays a big part in increasing the chances of gaining the maximum return on their investment.
- Potential for price appreciation: One of the most significant advantages of buying off-plan projects is the potential for price appreciation. As the project progresses and construction is complete, the value of the property increases. It can result in significant returns on investment for buyers.
- Flexible payment plans: Many developers offer flexible payment plans for off-plan properties, allowing buyers to pay in instalments over an extended period. It can make purchasing a property more affordable and manageable.
- Newer buildings and amenities: Off-plan projects feature new structures and amenities compared to existing properties. It can provide a modern living experience with updated features and technology.
- Lower initial costs: As off-plan properties are purchased before completion, buyers can benefit from lower initial costs when compared to buying a completed property. It can make investing in real estate more accessible to many buyers who may not have the budget to purchase a completed property.
- Flexible Payment Options and Cheaper Prices: Off-plan properties provide lower prices and more financial flexibility, which benefits both seasoned investors and first-time buyers. With multiple projects released each month, developers compete primarily on price and advantageous payment arrangements like paying 50% ahead and 50% after completion or the “1% per month” payment plans. Some projects’ values increase to far over 40% after handover, offering off-plan purchasers a sizable advantage. These price calculations may vary based on the developers.
- Sell Before Completion – Quite often investors can sell off their off-plan property prior to a project’s completion. Assuming the market has performed well and the project proved popular owners can often sell at a considerable profit.
- You Buy Brand New – As much as most of us hate to admit it, we all love something new. Whether it’s a new car or a brand-new property there is something rather special and satisfying about having something that has never been used before. This is exactly what you get with an off plan property that is not only new but if done right will feature the latest design, technology and lifestyle features, and amenities.
The Oqood certificate is a document issued by the Dubai Land Department (DLD) during the off-plan property registration process. It provides proof of ownership for buyers of off-plan properties, which are properties that are yet to be constructed.
If the property is ready to hand-over then the RERA issues a title deed of the property; however when the property is off-plan or under construction an Oqood certificate is issue by RERA under buyer’s name that ensures the property is registered under the buyer’s name.
For off-plan purchases, an SPA (Sale & Purchase Agreement) is signed, which outlines the expected completion date of the property. Once the SPA is signed, an Oqood document is issued, which serves as a temporary registration till the time the buyer has the title deed in possession.
Although it is very rare in the UAE Real Estate Industry, however if the seller fails to complete, the buyer can revoke the agreement. The deposit will be returned to the buyer, with interest and the vendor is liable to pay for any outstanding fees from the contract.
Question about buying
As more expats relocate to Dubai and foreign investment rises, the city develops and redevelops incredible new properties to meet the population’s needs. The off-plan market has seen an all-time high in investments. While buying ready properties may be more accessible, investing in off-plan has far too many benefits.
- Familiarise Yourself with the Dubai Market: Start by gaining a baseline understanding of the Dubai real estate market and the laws at play. Research different communities and stay updated on the latest projects and developments.
- Consult with an Expert: Engage with experienced off-plan agents or agencies who can provide in-depth insights into the market. They can keep you informed about the most current projects as well as upcoming opportunities.
- Determine Your Preferences: Clearly define the type of property you want to invest in and where. Decide on either an apartment, townhouse, or a villa, and specify your preferred communities.
- Explore Suitable Options: Explore the available options in your chosen category and location. Consult with your agent to narrow down your choices and select the property or project that best aligns with your investment/buying goals.
- Reservation and Contract Signing: Reserve the unit you’ve selected and proceed to sign the relevant contracts. The Sales and Purchase Agreement (SPA) is a crucial document that outlines the terms and conditions of your purchase.
- Payment Schedule: Follow to the payment schedule as outlined in the SPA. Off-plan properties typically involve a series of part payments spread over the course of the construction period.
- Take Possession and Enjoy: When the property is completed, undergo the handover process of inspecting the property to ensure all is in order. Once you are happy with everything you take possession and enjoy your new home or investment.
Yes, down payments and payment plans vary significantly between developers. Payment plans for off-plan properties can range from monthly instalments during construction to 5 years after completion. Extended post-completion payment plans may eliminate the need for mortgages; however, pre-completion payment plans (generally 40-60 per cent of the total sales price) can be aggressive. First-time buyer mortgages typically require 20-25 per cent of the purchase price in equity. The number and rate of instalments are determined by the buyer’s residency, the length of the mortgage, and the property value.
Yes, foreigners and nonresidents can buy property in Abu Dhabi and Dubai.
Unlike many countries around the world, the UAE property market is open to all. Whether you are from the UK or India there are no restrictions to you buying and owning a property in any of UAE’s freehold areas.
If you cannot meet the payments for your off-plan property in Dubai, it is crucial to understand the potential implications and the possibility of getting a refund. In such situations, the specific terms and conditions outlined in your Sales Purchase Agreement (SPA) will determine the refund amount, if any.
A real estate broker is a professional with a state real estate broker license who helps buy, sell and transfer property. They use their expertise and knowledge of the real estate industry to assist clients with paperwork, decision-making and legal compliance.
To put it briefly: The difference between the real estate agent and a real estate broker is that a real estate agent is licensed to help people buy and sell real estate, and is paid a commission when a deal is completed. The agent may represent either the buyer or the seller. A real estate broker does the same job as an agent but is licensed to work independently and may employ agents.
Question about mortgage
Getting a mortgage for an off plan property is definitely possible in most cases and almost always when it comes to the big developers in Dubai. Different lenders will set their own qualifying criteria however this is very similar to what would be applicable for a ready property. It is worth noting that the maximum loan for an off plan property is 50% of the purchase price.
If you are self-employed, lenders may ask for a year’s worth of bank statements and two years’ worth of business audits. On average, the pre-approval mortgage process in Dubai takes between five and seven working days followed by a further seven days to receive your confirmation letter.
If you meet the eligibility criteria of the bank, getting a mortgage in the UAE can be a relatively straightforward process. Make sure to get a mortgage pre-approval before beginning your search for a property so you know your budget beforehand.
However, getting a mortgage in the UAE involves a number of key limitations, which will differ depending on whether you’re an expat, UAE national or non-resident: The mortgage amount cannot exceed 85% of the home price for residents, 80% for expats, and between 50% and 80% for non-residents.
Yes. When you leave the UAE you can keep the property as a buy-to-let. Most of the banks are mainly concerned with you keeping up your mortgage repayments and not falling into arrears.
If employed: 65 years of age. If self-employed: 70 years of age.
As part of the new rules, the new investment limit to obtain a UAE Golden Visa through investment is reduced to AED 2 million. No restriction exists on whether the property is paid through a mortgage or cash or bought off-plan. The rules also do not nullify your visa if you stay outside the UAE.
Each borrower is only entitled to seek a loan for one property falling within these two categories and therefore it would appear that these LTV ratios are intended for owner occupiers. If UAE nationals seek loans for a second home or investment property, the LTV must not exceed 65 per cent of the value of the property.
You will need a passport, a residency and Emirates ID, latest salary certificate, last 6 months of statements for all accounts and payslips, proof of current address (DEWA bills or Ejari contract), latest credit card(s) statements as well as proof of additional income (rent, bonuses, etc.).
Question about selling
It’s the purchasing and selling of property before the property is constructed and completed. Only the plan for it exists.
Buyers and seller must come to agreement with price and terms, sign contracts and apply for No Objection Certificate (NOC) where the new buyer is registered with the developer. Once transfer is complete, the new buyer will ultimately take over all the outstanding payments.
Whether or not you’re able to sell an off-plan property before completion is mainly down to the property developer behind the project. When you buy a unit in off-plan property development, you’ll sign a contract that contains legal information regarding the purchase.
Question about renting
As a legal resident with a valid Emirates ID, any expat can rent or buy residential properties in Dubai. The city boasts a thriving real estate market with options that cater to tenants and buyers who are looking for luxury, affordability, and everything in between.
You can gain maximum profit when you sell it upon project completion as it will then have an increased market value. – Once the off-plan property is in ready condition, it can be rented out to earn a decent rental income.
Yes, non-residents can rent out property in Dubai. Many foreign investors purchase properties in freehold areas, then lease them out to generate a steady stream of rental income. It’s an appealing investment strategy given Dubai’s status as a business hub and tourist destination, which results in high rental demand.
UAE rent prices are not expected to fall any time soon, experts indicates that as more residents look to buy property in a significant shift for the once quite transient city.