{"id":21442,"date":"2020-12-30T13:13:37","date_gmt":"2020-12-30T09:13:37","guid":{"rendered":"https:\/\/dev.spinvestment.com\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/"},"modified":"2022-03-02T17:25:51","modified_gmt":"2022-03-02T13:25:51","slug":"uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment","status":"publish","type":"post","link":"https:\/\/www.spinvestment.com\/es\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/","title":{"rendered":"UAE real estate: Off-plan or ready property, what are you planning to buy? | SP Investment"},"content":{"rendered":"<h2><a href=\"http:\/\/spinvestment.com\/wp-content\/uploads\/2020\/12\/UAE-real-estate-Off-plan-or-ready-property-what-are-you-planning-to-buy.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-235170\" src=\"http:\/\/spinvestment.com\/wp-content\/uploads\/2020\/12\/UAE-real-estate-Off-plan-or-ready-property-what-are-you-planning-to-buy.jpg\" alt=\"UAE real estate: Off-plan or ready property, what are you planning to buy\" width=\"1200\" height=\"800\" \/><\/a><\/h2>\n<h2>The secondary market has performed well due to falling prices and reduced down-payments<\/h2>\n<p>Of the 8,675 property sales transactions in the third quarter, almost 63 per cent were in the secondary market, an increase of 21.7 percent compared to the second quarter this year, according to Dubai Land Department. \u201cIf you\u2019re looking at the secondary market today and the end user\u2019s access to mortgage, now is the best time to buy, depending on your outlook on Dubai\u2019s future,\u201d says PP Varghese, partner and head of real estate strategy and consulting at Knight Frank. He talks about the resilience of the market, and says, \u201cI suggest purchasing a unit in a good community in a good location because prices and mortgages are at their cheapest.\u201d<\/p>\n<p><strong>Ready property appeal<\/strong><\/p>\n<p>A major advantage of the secondary market from an end user\u2019s perspective is the certainty around construction delivery. Chris Hobden, head of strategic consultancy at Mena, Chestertons, says, \u201cWhen buying something that\u2019s completed versus off-plan, you know exactly what you\u2019re getting in terms of the property\u2019s overall quality and how it\u2019s fitted out internally.\u201d With a well-known developer, this is not usually an issue, but with a developer working on a project for the first time, it becomes more of a concern, according to Varghese.<\/p>\n<p>Additionally, residential property prices have significantly come down so there are good deals in the secondary market. In the last 12 months, residential property prices in Dubai fell by 11.7 per cent, according to Cavendish Maxwell\u2019s Q3 2020 UAE Property Market Report. \u201cIf you\u2019re a cash buyer or in a position to get a mortgage, there are some potentially attractive deals to take advantage of in Dubai\u2019s market,\u201d said Hobden. The Central Bank of the UAE increased the mortgage allowance for first-time buyers in March 2020, allowing expats to borrow up to 80 per cent of their property purchase price and UAE nationals up to 85. This is an increase from 75 per cent and 80 per cent, respectively. Another advantage of ready properties is the possibility of immediate income from an investment standpoint.<\/p>\n<p>\u201cIf you\u2019re buying in the secondary market and the property is ready, you can rent it out or live in it immediately. Whereas in the off-plan market, you\u2019ll have to wait one or two years before you see any return on it,\u201d says Richard Waind, group managing director at real estate agency Better Homes.<\/p>\n<p>Although residential yields in Dubai have declined at a faster pace than capital values, an investor can still get a gross yield of more than 6.5 per cent for an apartment. This is comparatively strong compared to other large international residential markets, according to Hobden.<\/p>\n<p><strong>Off-plan: Flexibility at a price<\/strong><\/p>\n<p>While the secondary market has enjoyed more attention in recent months, there are unique advantages to purchasing an off-plan property. \u201cOne of the biggest attractions of the off-plan market is the flexible payment plans and lower down payment,\u201d explains Waind.<\/p>\n<p>\u201cIn the secondary market, as a first-time buyer you\u2019re looking at a down payment of 20 per cent. For a second-time buyer if you\u2019re buying with a mortgage, it\u2019s 40 per cent. Whereas if you\u2019re buying in the off-plan market, you can often pay a down payment of five to 10 percent.\u201d The ability to choose from different units is another advantage, according to Hobden.<\/p>\n<p>When it comes to post-handover payment plans, these don\u2019t usually come at a discount. \u201cThe prices for units [with post-handover payment plans] include the financing charges that the developer is taking on. So the developer is becoming a bank in this instance and offering the unit at their own risk, and that is not necessarily at a lower cost than what banks normally charge,\u201d says Varghese.<\/p>\n<p>A developer typically looks at a return of anywhere between 18 and 20 per cent on their equity and would expect their return to be on a longer time horizon by offering this payment structure. Therefore, it\u2019s never going to be as cheap as what banks offer, which is 2.5 to 3 percent annually, according to Varghese. \u201cWhat the developer is offering is flexibility in choosing your finances, in the sense that you\u2019re not stuck with a bank giving you a mortgage,\u201d he says. This flexibility still serves many types of buyers, including those looking to buy their second or third units.<\/p>\n<p>It\u2019s also a viable option for self-employed people who have cashflows coming in, first-time buyers who don\u2019t qualify for a mortgage, and those leaving the country in a few years and who might not want a financial commitment that ties them down.<br \/>\nMarket expectations<\/p>\n<p>However, developers have largely held back from launching new projects this year, partly because they\u2019re looking to sell newly completed units. One of the few projects that were launched this year was the Elan neighborhood in Majid Al Futtaim\u2019s Tilal Al Ghaf, where homes were sold out within a few days.<\/p>\n<p>\u201cWhen you see a good off-plan launch in the market, it\u2019s getting snapped up very quickly. However, the market has been driven in the last six to nine months more by domestic end-users who are looking for turn-key property that they can live in,\u201d says Waind. Waind expects a peak supply of new properties to come into the market over the next 12 months. Hobden, too, expects off-plan projects to re-appear in 2021, when there is more certainty. \u201cI think developers will want to take advantage of improvements in the local economy against the backdrop of Expo2020 Dubai.\u201d<\/p>\n<p><a href=\"https:\/\/gulfnews.com\/business\/property\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-1.1608721459353\">Source<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>The secondary market has performed well due to falling prices and reduced down-payments Of the 8,675 property sales transactions in the third quarter, almost 63 per cent were in the secondary market, an increase of 21.7 percent compared to the second quarter this year, according to Dubai Land Department. \u201cIf you\u2019re looking at the secondary market today and the end user\u2019s access to mortgage, &#8230;<\/p>","protected":false},"author":1,"featured_media":21441,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[58],"tags":[],"class_list":["post-21442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.1 (Yoast SEO v25.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>UAE real estate: Off-plan or ready property, what are you planning to buy? | SP Investment - SP Real Estate Investment<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.spinvestment.com\/es\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UAE real estate: Off-plan or ready property, what are you planning to buy? | SP Investment - SP Real Estate Investment\" \/>\n<meta property=\"og:description\" content=\"The secondary market has performed well due to falling prices and reduced down-payments Of the 8,675 property sales transactions in the third quarter, almost 63 per cent were in the secondary market, an increase of 21.7 percent compared to the second quarter this year, according to Dubai Land Department. \u201cIf you\u2019re looking at the secondary market today and the end user\u2019s access to mortgage, ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.spinvestment.com\/es\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/\" \/>\n<meta property=\"og:site_name\" content=\"SP Real Estate Investment\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/spinvestmentre\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-30T09:13:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-02T13:25:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.spinvestment.com\/wp-content\/uploads\/2020\/12\/UAE-real-estate-Off-plan-or-ready-property-what-are-you-planning-to-buy.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"spadmin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@spinvestmentre\" \/>\n<meta name=\"twitter:site\" content=\"@spinvestmentre\" \/>\n<meta name=\"twitter:label1\" content=\"Escrito por\" \/>\n\t<meta name=\"twitter:data1\" content=\"spadmin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Tiempo de lectura\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutos\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.spinvestment.com\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.spinvestment.com\/uae-real-estate-off-plan-or-ready-property-what-are-you-planning-to-buy-sp-investment\/\"},\"author\":{\"name\":\"spadmin\",\"@id\":\"https:\/\/www.spinvestment.com\/#\/schema\/person\/c1deaa444983fd0e210fe06aec78a628\"},\"headline\":\"UAE real estate: Off-plan or ready property, what are you planning to buy? 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