In recent years, the real estate market in the Emirates has been developing at an incredible pace. Another rotating building or a branded property with all the amenities and more no longer surprises anyone here. Dubai has taken it a step further: property owners can now resell not only ready apartments but also properties that are still under construction. In this case, the property owner not only recovers their invested capital but also enjoys a significant profit. Property prices in Dubai are constantly rising, with an average annual increase of 20%. This answers the question of why there are so many people interested in buying off-plan properties or investing in construction.
Let’s take a closer look at the advantages of purchasing off-plan properties in Dubai and explore the ways in which one can profit from reselling real estate.
- Why Choose Dubai for Property Investment?
Real estate in Dubai is always in demand. Even during the pandemic, apartments were selling rapidly. As the saying goes, demand creates supply. In Dubai, there is never a shortage of supply in the real estate market.
One significant advantage is the absence of property and income taxes. When purchasing property, buyers only need to pay a one-time fee of 4-5% of the apartment’s value. There are no annual or recurring taxes on income. The government receives its share of the profit, the buyer acquires the property and everyone is satisfied.
Moreover, property owners in Dubai can easily obtain residency visas for up to 3 years, allowing them to live and work legally in the Emirates. Additionally, spouses and minor children can also apply for residency visas as they are immediate family members of the property owner.
Investing in Dubai real estate is the best investment choice today. The Emirates offer projects that were considered unimaginable just yesterday. The creativity and imagination of local construction companies are truly admirable. If you have been waiting for the right moment to start investing, it has arrived! Don’t miss the opportunity to acquire property in your dream city at a favorable price and resell it in the future. The real estate market here is growing and changing at such a rapid pace that it’s hard to keep up.
- Where and How to Choose Off-Plan Properties for Resale?
When buying property abroad, the majority of investors prefer to purchase ready-made homes. However, many forget that off-plan properties offer the most advantages. When choosing properties for investment, it is important to keep in mind three golden rules for investors:
- Location and infrastructure of the property;
- Type of property;
- Size of the property.
Let’s delve into each point in more detail.
- It is well known that the location of the property plays a crucial role in its price, profitability, income and the community that will reside nearby. Therefore, when buying apartments, it is important to carefully select the area. One should be prepared for the fact that apartments in famous areas of Dubai will be significantly more expensive than similar ones in «less prestigious» areas. Luxurious areas such as Dubai Marina, Palm Jumeirah, Emaar Beachfront, Peninsula and Business Bay witness over half of the real estate transactions in Dubai. The majority of investments flow into these areas. The presence of hospitals and clinics, restaurants and shops, shopping and entertainment centers, sports facilities and children’s playgrounds within walking distance plays a vital role in choosing property.
- Residential properties are more advantageous for investment. Offices
have lost their popularity in recent years, especially with the rise of remote work due to the COVID-19 pandemic.
When it comes to residential properties, it is wise to choose apartments with well-designed layouts. Apartments with 1, 2, or 3 bedrooms are in high demand.
Based on the aforementioned factors, the following conclusion can be drawn: it is better to choose an off-plan apartment in a good location rather than large villas in less prestigious areas of Dubai. High-quality apartments are quickly snatched up in the market.
By considering these factors and making informed decisions, investors can capitalize on the fast-growing real estate market in Dubai. Whether it’s for personal use or investment purposes, buying off-plan properties in Dubai offers numerous advantages and opportunities for substantial profits in the future.
Possible Risks in Reselling Off-Plan Properties
The primary principle of the Dubai real estate market is safety. The safety of buyers and sellers is paramount and the government strictly regulates it. Fraudulent schemes, unscrupulous developers and deceived property investors are not common in this country. That is why investing in the Emirates is a safe choice. Dubai continues to prove itself as one of the safest cities in the world.
The Dubai Land Department oversees all transactions related to residential and commercial properties. The Real Estate Regulatory Agency operates under the supervision of the Land Department. All construction companies wishing to obtain a construction license, attract investments and eventually sell the completed project must collaborate with the Agency.
To obtain a construction license, developers must adhere to certain regulations:
- The land on which the construction will take place must belong to the developer. If the land is leased rather than owned, the Agency will not grant permission for construction;
- The developer must make an upfront payment of 10% of the project’s cost;
- The developer is only allowed to sell off-plan properties if 20% of the construction work has been completed;
- The developer is required to provide a bank guarantee from one of Dubai’s banks.
Another advantage that may encourage individuals to buy villas or apartments in Dubai is the installment plan. It is offered to all investors purchasing off-plan properties. The buyer pays a small percentage of the total property cost during the initial stages of construction. The remaining amount is paid after the completion of the project. This means that even if something were to go wrong and the buyer encounters the rare unscrupulous developer who is an exception in Dubai or the entire country, they would not lose a significant amount.
In the event of unforeseen circumstances that lead to construction being on the verge of suspension, the government quickly finds a new developer to complete the project. As we can see, the Emirates take the construction business seriously and responsibly.
Reselling Off-Plan Properties
Dubai is a city of opportunities, where everything is aimed at providing comfort and convenience to its residents. The government strives to simplify the lives of its citizens and those who permanently reside in the Emirates.
How many countries can you name where you can sell property without even having the ownership certificate? In the Emirates, it is possible. The construction company provides a document confirming the acquisition of the property, along with a certificate from the developer registration database. These documents are sufficient for selling both completed and off-plan properties.
It is important to note that each construction company sets its own conditions for reselling off-plan properties. Typically, companies require the buyer to make a payment of 40-50% of the total property cost before the sale. Before entering into a contract with the developer, it is necessary to clarify all the details and requirements.
Even if you have chosen a reliable developer, purchased an apartment in Dubai at favorable prices and received the property within the specified timeframe, there is still a risk of losing money when reselling the property. Property market fluctuations are inevitable and even professionals cannot predict them accurately. Numerous factors influence these fluctuations, ranging from economic changes to the political situation worldwide. If the property prices shift unfavorably, it is advisable to be patient and wait for the situation to normalize. Rushing to sell the property, especially off-plan properties, is not recommended. The real estate market will eventually stabilize and you will be able to resell your property at a profitable price.
Top 5 Districts for Profitable Investments
A district named after the ruler of Dubai, Mohammed Bin Rashid City (MBR) has emerged from nothingness. It was once an empty land but is now being developed into an elite real estate and a tourist and business center. Property prices start at $250,000. The highlight of this district will be a 3-kilometer-long lagoon and the largest mall in the world. The construction is expected to be completed by 2026, making it the best time to invest in this district.
Palm Jumeirah is a symbol of luxurious and comfortable living. The district boasts a well-developed infrastructure, with all essential amenities within reach. Skyscrapers, private villas and apartment buildings coexist in the Palm Jumeirah area. The most unique, luxurious and comfortable villas in Dubai can be found here. A luxury villa in this area can be purchased for an average price of $2,000,000.
Business Bay is the business hub of Dubai. Here, offices blend with residential buildings and landscaped designs complement waterways. Business Bay offers imagination-inspiring homes with pools, yacht marinas and water taxis, among other amenities. Undoubtedly, this district is ideal for investment. As a property owner in Business Bay, you will never lose out when reselling real estate. The average property price starts at $250,000.
Dubai Marina is both a residential area and a popular resort destination due to its proximity to Dubai’s famous tourist attractions. The district boasts elite real estate with incredible views of the city. Dubai Marina is considered one of the most profitable areas in terms of property return on investment. Whether it’s selling, reselling, or renting out properties, this area offers the highest returns. Property prices in Dubai Marina start at $500,000.
Emaar Beachfront is one of the most lucrative districts for investments due to its favorable location. In this area, you can purchase luxury properties at advantageous prices, with an average annual return of at least 8%. The average property price in this district ranges from $400,000 to $500,000.
Your time is invaluable, so use it wisely! Consult our specialists who are always ready to provide advice on any questions you may have. They will help you find the right property that suits your needs and guide you throughout the entire transaction process. Our team consists of true professionals who can minimize the risks associated with buying and reselling apartments and villas in Dubai. Our staff is well-informed about developers, the most profitable districts for purchasing real estate and ways to generate profits through property resale.
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