Going off the plan to get that coveted Holiday Villa in Dubai
The recent economic downturn and the subsequent repercussions on the Dubai realty
market led to severe heartburn among developers and investors alike. Prior to this,
there were plenty of risk-takers willing to invest in properties that were only at the
concept table. But it often takes a crisis to separate the true bravehearts from the
Lured by the charm of an off-plan property, there were many that later went on to singe
themselves terribly when the market went into a downward spiral. Off-Plan properties
by their very nature are a high risk/high reward proposition. For a partial investment,
investors stand to gain from appreciation advantages that far outstrip most other
investment options. All this is good when its smooth runnings in the market, however, it
becomes tough to excite investors when the market is sluggish and demand is slowing
Investing in off-plan properties is not for those looking to make speculative investments.
It is a well-calculated, long term strategy. Developers are known to favor such investors
and repose their faith by showering them with extra amenities, facilities, concessions
and discounts. Combining the inherent gains in capital investment with these financial
incentives is what gives off-plan investments their lucrative edge.
Given that this is a high-risk/high-reward game, it becomes extremely important for
investors to do their due diligence before putting their hard earned money into that
dream holiday villa, that’s still at the off-plan stage and may turn out to be a delinquent
One of the first things that greenhorn investors must keep in mind is that off-plan
properties are long term investments. So if you are expecting some instant gratification,
you are better off spending that money elsewhere.
The realty slowdown has gone on to affect nearly every developer irrespective of
whether they are big or small in terms of revenues and market capitalization. However,
it does appear beneficial to do the necessary due diligence behind each investment.
Reputation, past records of completed projects, adherence to quality of construction
and delivery timelines are but some of the aspects that one can evaluate a potential
Many-a-times, it may so happen that one may reside at a place that is far away from the
site location. In such cases, it becomes difficult to keep track of developments and verify
what is being conveyed in the official communication from the developer. This is why,
one must make arrangements for regular self-visits or appoint someone who can report
in on their behalf. The Real Estate Regulatory Agency (RERA) would be a good place to
track project updates as they are submitted in by developers.
Lastly, the proliferation and expansion of the Dubai Metro may have opened up new
avenues for investors. But, always remember that one must be careful when considering
an off-plan property that is located at quite a distance from the city centre. Chances are
that developments closer to the city centre stand a better chance of being completed on
time, than those that are located further away.
If one plays their risks out judiciously, they stand a great chance at acquiring that
coveted Dubai property for a rate that’s significantly attractive than its market value if
one were to purchase it upon completion.