Off-plan vs Secondary Properties in Dubai: Your Guide to Buying the Right One

If you want to invest in the thriving real estate market of Dubai, you have to answer a crucial question: should you opt for an off-plan property or a secondary property? In this article, we will guide you through the intricacies of each option so you can make an informed decision.

Allures of Off-plan Properties in Dubai 

If you’re looking for properties with lucrative ROI in Dubai's property market, here is why you should opt for off-plan properties:

Cost-effectiveness: These properties often have a lower asking price than completed properties and that's why they offer significant capital appreciation as construction progresses. This can translate into a great return on investment, especially in a buoyant market like Dubai.

Flexible payment plans: The developers in Dubai provide flexible payment structures as an incentive for investment. The payments are spread over the construction period, making these off-plan properties accessible to a wider range of investors.

Higher rental yield: Dubai attracts tourists and business people from all over the world. This means there's a steady supply of tenants who want a place for rent to live. Off-plan properties have a higher rental yield because they have great strategic new locations and world-class infrastructure.

Potential Challenges of Off-plan Properties:   

While off-plan properties have great potential ROI, yet there are certain nuances to be considered.

Construction delays: Delays can occur due to factors like material shortage or other unforeseen circumstances such as Covid-19 pandemic and these factors can push back the completion date, impacting the occupancy timeline and rental income generation. 

Market fluctuations: Like any other market, the Dubai property market also experiences fluctuations. So, if the market dips while the property is under construction you might face challenges upon resale.

Limited control and visibility:  When you buy an off-plan property, you buy based on a plan and its visualizations. There is no physical brick-and-mortar building available to see yet. You lack final control over the product. During the construction, there can be material substitutions or changes in the design. 

The Allures of Secondary Properties in Dubai

Secondary properties are also known as resale properties. These properties have their distinct advantages. 

Tangible Assets: When you decide to invest in secondary properties, they are available for inspection, unlike off-plan properties. You can inspect the layout and condition of the property, and determine its suitability before investing.

Immediate Occupancy: You can move in, or rent a secondary property straight away. This eliminates the wait that is associated with off-plan projects. This benefit is particularly attractive for those seeking a steady stream of income. 

Simpler Financing: It is easier to get a long-term mortgage for these properties because these properties are already complete, and the banks have a clear picture of the asset and its value.

Negotiation Potential: There is a lot of room for price negotiation. This can be an advantage if the market is slowing down, or if the property requires renovation.

The Considerations for Secondary Properties

Potentially higher cost: Secondary properties are priced higher than off-plan properties. This can put a strain on your budget. 

Potential higher maintenance costs: These properties have already been used, so there is a chance that you might encounter maintenance issues. You should also take into account potential renovation costs when you buy a secondary property. 

Possible lack of modern amenities: Secondary properties might lack the latest amenities, or design features you could find in new developments.

Conclusion: 

Opt for off-plan properties if you value affordability and modern features. And if you're comfortable with the waiting period.  

Opt for secondary properties if you are short on time and want immediate occupancy. These are also suitable for those who prioritize tangible assets and are comfortable with negotiating as well as renovations.