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Off Plan vs Ready Properties in Dubai – Which One is Better?

Off plan vs Ready Properties Dubai

Generally speaking, the property market in Dubai is typically divided into two categories: off-plan and ready-made properties. Off-plan are new property launches from the developers. Ready-made, as it sounds, are built properties, which can be new or previously owned in matured and established residential areas. So, off plan vs ready properties, let’s take a look.

Off Plan vs Ready Properties in Dubai

According to DXB’ “Off-Plan vs Ready Property Sales”, off-plan properties accounted for 56% (vs. ready-made 44%) of total sales volume in 2022, confirming that investors in 2022 prefer ready-made properties in Dubai.

Off plan vs Ready Properties Dubai
Source: DXB Interact

Did you also notice? Over the 3 years, there has been a shift in demand (charts below) towards off-plan for apartments and villas in Dubai.

Off plan vs Ready Properties Dubai
Source: DXB Interact

As an investor, how do you choose?

Learning the pros and cons of ready-made and off-plan in Dubai, and how they differ from one another, can help you understand your needs, risk appetite, and financial readiness. Below, we have listed the pros and cons of both, so you can have an overview of the two landscapes.

For an in-depth read on “Can the Best Off Plan Properties in Dubai be a Good Investment?” – Click here.

Ready-Made Dubai – Pros & Cons

Ready-Made ProsReady-Made Cons
1. Established location1. Price is generally higher
2. Buying a property you can physically see
(know what you are getting into)
2. Down payment is higher
3. Price is negotiable3. Old design (May need renovation)
4. Investors can move in or rent it out immediately4. Less payment flexibility
5. Immediate rental income5. Pre-owned property
6. Get the highest LTV for bank financing6. Pre-existing problems
(Repair / maintenance)

Off Plan Dubai – Pros & Cons

Off-Plan ProsOff-Plan Cons
1. Price discount1. Risk of delays (high probability)
2. First choice on unit2. Risk of bankruptcy
3. Small down payments3. Waiting time
4. Flexible payment terms4. Nothing tangible
5. High return on investment (ROI)5. Market fluctuation
6. Brand new and modern6. Oversupply

Besides the comparison, it is also crucial to keep in mind:

1. Market Cycle & Market Timing

The real estate market is a cycle that never goes away. Once an investor learns to identify this cycle, the old saying ‘buy low, sell high’ becomes much easier to achieve.

During a down market, you will probably get better deals in the secondary market due to an increase in supply, but when the market is booming, the off-plan developers may have incentives to draw in investors that can be a more attractive investment.

2. What are Current Similar Properties Selling For?

No matter what, do your homework and do not speculate. If you are looking to invest in a rental property, check how much the property rents out for so you can calculate the ROI and yearly cash flow. We have created a free cash flow calculator for both long-term rental and short-term rental to help you compare property performances, and ultimately, find that one deal that can offer you the best cash flow.  

3. Available Liquidity / Mortgage Offers

What is the current interest rate environment? This will determine your monthly mortgage payments. Regardless, it’s important to know how much you can afford to borrow before you find a property. Ready-made and off-plan properties have different types of payment schemes, so it’s important to compare and understand these payments, and know when they are due to ensure you have enough liquidity and funds for them.

Final Thought

Don’t forget, it’s important to understand just how much funds you’ll need to fork over at the beginning of your purchase. In Dubai, a down payment on a property is typically 20% of the total value, and some off-plan developers can require you to put down up to 50% upfront. These numbers can add up along with extra associated fees, so make sure you have sufficient extra funds prepared.

That being said, look at both pros and cons, and buy within your own means.

Next: Can Off-Plan Properties be Good Investments?

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