🅿️FLIPPING OFF-PLAN PROPERTIES

FLIPPING OFF-PLAN PROPERTIES

Off-plan properties are real estate projects available for purchase before their full completion. Buyers have the opportunity to acquire these properties at an early stage, often before the construction phase begins. The advantage lies in entering the market at a relatively lower cost compared to fully completed properties.Dubai’s off-plan property market has experienced remarkable growth, driven by the city’s favorable business environment, strategic location, and ambitious infrastructure projects, which are fueling demand, particularly for off-plan properties.The attractiveness of the real estate market, especially in residential units, is evident in the substantial surge in transaction values and the notable growth in transaction volume over the past year. The following table illustrates these trends:

Data Source: Residential Real Estate Report - Q1 2023 Abu Dhabi & Dubai, p. 5

Advantages of Off-Plan Properties:

• Lower prices compared to the market value once the property is completed, providing the potential for capital appreciation.

• Opportunity to select prime units within the development, securing desirable locations or features.

• Attractive payment plans spread the payments over the construction period, enhancing affordability and cash flow management.

• Payments are held in escrow by the Dubai Land Department. The release of funds to the construction company is contingent upon the completion of each construction phase as planned and checked by government inspections.

Advantages of Flipping Off-Plan Properties:

• Hold the off-plan property only between 6 and 24 months. The property will be sold well before completion and handover after 4 to 5 years.

• Generate substantial returns with only a fraction of the full purchase price. Off-plan properties in Dubai often offer flexible payment plans, allowing people to pay the purchase price over an extended period, typically spanning 48 months. The final payment is made when the property reaches full development.

Hypothetical payment plan for a hypothetical property’s gross price of 2,508,000 AED:

Payment Plan (Example)