The Difference Between Off-Plan and Completed Properties in Dubai
If you’re looking to purchase real property in Dubai the first major decision that you’ll need to take is whether to buy one that is off-plan home (properties which are still under construction) or one that is a Completed property (fully constructed and ready for immediate use). Each feature has pros and pros and the excellent option will depend on your goals for investment, the timeframe and risk-aversion.
The following article can help to understand the differences between these two types of property and help you make an informed choice.
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What is Off-Plan Property?
A property that is off-plan is a property which is purchased prior to the construction is completed or, in some instances before it begins. Buyers usually base their choice on the design and plans. It’s become a common option, especially in Dubai and other cities, with well-known developers such as Emaar as well as Damac offering appealing off-plan houses that come with flexible payment options.
Characteristics of Off-Plan Properties:
1. Lower Price:
Off-plan homes are generally priced cheaper than completed ones, especially when purchased during the early phases of construction. The best off-plan projects in Dubai often increase in value as development progresses, making them a great investment for capital appreciation.
2. Flexible Payment Plans:
Developers typically offer attractive payment plans that allow buyers to spread their payments across the construction period, reducing the financial burden. This is a common advantage when buying off-plan villas in Dubai, where extended payments can ease the investment process.
3. Potential for High Returns:
Off-plan properties often appreciate in value as the project nears completion, offering potential capital gains when market conditions are favorable.
4. Customization Options:
Since the property is still under construction, buyers may be able to modify certain features, such as the interior layout or finishes, to better suit their preferences.
Risks Involved in Off-Plan Properties
Construction Delays: Delays occur frequently when working on construction projects. They may delay your planned moving-in date or rent income timetable.
Developer Reliability: The project’s success greatly depends on the credibility of the designer. Make sure that the developer has been RERA certified so that you can minimize the possibility that the project will be delayed or cancelled.
Market Volatility:
The market for property during the construction stage could affect the value of your property.
What is a Completed Property (Ready Property)?
A completed, or ready property, is fully built and ready for immediate transfer to buyer. Completed properties in Dubai are ideal for those who want to move in right away or start earning rental income immediately.
Characteristics of Completed Properties:
- Instant Move-In/Rental: One of the primary advantages of Ready properties is the ability to get the property or lease it immediately after the purchase has been completed, and receive quick returns.
- What You See is What You Get: The property’s design and quality is fully visible to you. the quality of the home and its design prior to making a final decision. It reduces the chance of any discrepancies between the final property and the expectations you had.
- Established Market Value: The value of an completed home is determined by conditions in the market, which makes it much easier to assess costs and evaluate possibility of investing.
Considerations for Completed Properties
- Higher Upfront Costs:
Properties that are completed typically sell for higher that off-plan property due to their quick accessibility and lack of any construction risks. - Limited Personalization:
As the home has been constructed and occupied, there’s no possibility of making changes to the layout or style. - Mortgage Availability:
A mortgage loan is typically simpler to obtain for Ready properties because the property is used as collateral. This makes the loan process easier.
Which Option Should You Choose?
Guide to Buying Off-Plan Properties:
Looking for Capital Gains:
If you’re focused on long-term investments and want to benefit from potential capital appreciation, buying off-plan properties may be the best choice. As property values increase upon completion, these investments can offer significant returns in favorable market conditions.
Affordability and Time:
If you don’t need immediate occupancy and prefer lower upfront costs, off-plan properties in Dubai offer greater flexibility and staggered payment options.
Guide to Buying Completed Properties:
- Immediate Use or Rental Income: If you’re looking to move into your property immediately or begin making rental revenue, completed properties can be the excellent option.
- Low-Risk Investment: There is no chance from delays in construction or modifications in the plans, properties that are ready can be considered to be a safer choice for an investment option Particularly for secondary properties situated in well-established communities such as Palm Jumeirah.
- Higher preliminary Capital: Although the properties that are ready could require more upfront capital they serve security and rapid return, which is why they are attractive potential buyers who are looking to take advantage of quick occupancy or opportunities for rental.
Legal Considerations in Dubai
Whether you’re buying off-plan or completed properties, it’s crucial to follow the legal requirements set forth by the Dubai Land Department (DLD):
• Off-Plan Purchases:
Ensure that the developer is RERA-registered and that all transactions are conducted through an escrow account to safeguard your investment.
• Completed Property Purchases:
For completed properties, you will need to register the transaction with the DLD, transfer ownership, and obtain a title deed. The buyer is also responsible for paying a transfer fee to the DLD.
Costs to Consider :
Regardless of whether you’re buying an off-plan or completed property, some additional costs must be factored into your budget:
• DLD Transfer Charge: 4% of the property’s purchase price.
• Agent Commission: Typically 2% of the sale price (negotiable).
• NOC Fees: For off-plan properties, a No Objection Certificate (NOC) from the developer is required. The fee can range from AED 500 to AED 5,500 depending on the project.
• Service Charges: After acquiring the property, you’ll also need to account for service charges, which vary depending on the neighborhood and type of property.
Conclusion: Off-Plan vs. Completed Properties in Dubai
Choosing between off-plan and Properties that are completed will depend on your financial goals as well as your personal tastes.
If you’re in search of immediate gains or want to buy a house in a hurry, properties that are completed will be the accurate option. But, if you’re prepared to sit and wait, you can enjoy lower costs and more flexible financing options, off-plan properties may help in providing greater long-term advantages.
Both of these options offer great investments within Dubai’s growing real property market However, it is essential to conduct your research know the cost that are involved, and partner with reliable real estate brokers and developers.
What Are Primary and Secondary Properties?
Primary properties are sold directly by the developer and are often either off-plan or newly completed. These come with perks like developer discounts and customization options.
Secondary properties, on the other hand, are resold by a previous owner and offer benefits like immediate availability and more room for price negotiation