There’s a boom of off-plan developments in Dubai. In 2023, some areas saw a 30% increase in property prices. By the third quarter of 2024, off-plan prices had begun stabilising due to the more than 40% new projects launched, allowing real estate companies in Dubai to pad their property inventories.
This means it’s an excellent time to invest off-plan. While prices are down compared to what they were in the same period last year, it’s just the law of supply and demand at work. The lower price also means buying off-plan now gives you better value for your money.
That said, investing in an off-plan property is not a decision to take lightly. You do have the option to acquire ready property instead. The question you must ask yourself is: Should you pick a ready or an off-plan property?
Why Buy Ready Property?
Ready property is a newly constructed or refurbished-for-resale property. It pertains to a villa or an apartment you can see, touch, walk into, and explore. In other words, it is a standing and completed structure with ventilation, air-conditioning, electricals, and plumbing already installed and ready for use.
Ready properties are ready to move into, complete with fit-out and furnishings. The fit-out may be basic, and you may need to hire your own interior designer and fit-out contractor to raise the quality to your standard, but the structure itself should be functional and ready to occupy as-is and immediately.
Ready properties are more expensive than off-plan projects. While they allow you to turn a quick profit, they may provide thin profit margins on flips/resales and a longer time-to-ROI on rentals.
That said, ready properties have the following advantages:
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Gratification: The villa or apartment is ready to occupy and move into. Ready properties provide instant gratification, whether you need or want a new house or simply want an asset added to your inventory.
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Immediate Income: When you buy a property ready to move into, you can list it with your broker for immediate resale or add it to your property manager’s inventory of long-, medium-, or short-term rentals. Whichever option you choose, you can immediately generate income from your ready property.
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Financing: Ready properties can be collateral for loans. You can use them to raise cash for high-return investments.
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Assurance: You don’t have to imagine what your acquisition looks like. You can see it with your own eyes. You can open cabinet doors, touch the laser-cut wood cladding, inspect the book-matched marble on the focal wall, etc. Thus, you’re assured you’re getting what you paid for. The amenities and features you were told you’d get already exist for your review.
Why Buy Off-Plan Property?
Off-plan properties are apartments and villas that exist only in drawings. They have detailed plans, including design and finishing drawings, that you can use to visualise how the property you’re acquiring will look once it’s finished.
Off-plan doesn’t pertain only to individual units. The entire project could be off-plan. In other words, even the building your unit will be part of and the gated community where it will exist may live only on paper. In this case, a site visit means looking at an empty stretch of land that goes on for miles.
When you buy off-plan, you’re buying an idea. You have been told what amenities and features to expect, but you must trust that the property developer will deliver everything according to what you’ve been told, what you’ve seen in drawings, and what’s displayed in model homes.
There’s obviously risk involved when you buy off-plan. Project completion could be delayed by several years, and a development could even get wholly called off. Finally, your apartment or villa could look vastly different from what was promised.
Even so, the following benefits can make the risks worth it:
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Capital appreciation: Once the off-plan property is completed, your investment will have grown in value. You can resell your completed apartment at the prevailing market price and enjoy significant capital gains (which the United Arab Emirates does not tax).
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Master-planned neighbourhoods: Investing in an off-plan development gives you the chance to get your foot into the door of a master-planned community.
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Value for money: All things remaining equal, an off-plan property will cost less than a corresponding ready property. Put another way, for the price of a ready property, you can buy a more upscale version or gain access to a better neighbourhood when you buy off-plan.
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Customisation: You can buy a lower-priced, bare off-plan unit and then spare no expense, fitting it out according to your desired specifications. This will make your property stand out and, thus, easier to sell or rent out.
Ready or Off-Plan – That Is the Question
To buy property in Dubai, you must choose between ready and off-plan projects. Ready-to-occupy properties can be sold or rented out immediately. Off-plan properties won’t be ready for a while and come with the risk of tying up your capital far longer than you planned. However, off-plan properties are unbeatable when it comes to capital appreciation. They also provide greater value for money than ready options.
