Choosing Between Off Plan vs Secondary Properties in UAE
As you begin your search for a new property in Dubai, a crucial decision awaits: do you prefer off plan or secondary properties? This choice plays a pivotal role in your property search.
It’s essential to grasp the concept of these terms, particularly if you’re unsure about their distinctions and importance. This article aims to precisely clarify these aspects.
We will explore the definitions of off plan vs secondary properties, highlighting the pros and cons of each. This breakdown will enable you to make an informed decision during your property hunt.
Off-Plan Property Vs Secondary Property
An Off plan property in Dubai is one that is still under construction, encompassing properties in the early planning or construction phases. This type of real estate serves as an appealing investment due to its attractive prices and the chance to secure property in prime locations before full development.
Investors in off-plan properties in Dubai often witness significant value appreciation once the property is completed, given the dynamic nature of the real estate market in the city. Conversely, a ‘Ready’ property is one that is fully constructed.
To summarize, in the Dubai real estate market:
- Off-plan Property: Under construction, with a committed delivery date by the developer.
- Ready Property: Construction is complete, ready for immediate occupancy.
Now, turning to Secondary Properties:
In contrast, a secondary property is one that has had a previous owner, and the current owner (not the developer) is selling it for profit.
In brief, secondary properties are those that are currently rented out or occupied by the owner and are already on the market for rental or sub-sale purposes.
Typically situated in established neighborhoods, these homes occasionally include off-plan properties sold by their owners in communities that are still maturing.
Off-plan versus Secondary Properties: Making the Choice
Off-Plan Properties:
Pros:
- Latest Designs
Choosing a new primary property ensures access to the most cutting-edge designs and amenities. Beyond aesthetics, the primary market offers various financial advantages.
- Lower Market Price
Buying primary off-plan properties often means a significantly lower price than the market rate, thanks to developer discounts and deals, providing excellent value for money.
- Developer Promotions & Flexible Payment Plans
Developers may cover legal costs, like the 4% Dubai Land Department fee, and offer flexible payment plans, enhancing the fiscal appeal.
- Higher Return on Investment
These factors contribute to healthy capital appreciation for primary off-plan properties, even before construction completion, offering the potential for significant profit upon resale.
- Low or No Refurbishment Cost
Primary properties have the advantage of minimal refurbishment expenses since the units are brand new.
Cons:
- Limited Supply
Demand for primary properties exceeds supply, leading to swift sell-outs within days of being on the market, requiring quick action for potential buyers.
- Possibility of Project Abandonment
There’s a slight risk with off-plan properties, as developers might abandon projects due to financial challenges. However, strict regulations from the Dubai Land Department (DLD) and Real Estate Regulatory Agency (RERA), such as a 20% project cost deposit in an escrow account, protect buyers.
- Delivery Might Not Meet Expectations
Especially with off-plan primary units, the final appearance remains unknown until construction concludes, potentially deviating from initial 3D models. Purchasing from well-established developers with a reliable track record becomes crucial to ensure high-quality, timely project delivery.
Secondary Properties
Pros:
- Established Unit and Location
Secondary properties, often ‘Ready’ properties, are situated in established neighborhoods. This provides a clearer understanding of the living experience, encompassing maintenance, amenities, and neighbors.
- Wider Choice of Options
In contrast to the fast-paced primary market, secondary properties offer a broader selection. The advantage lies in the greater availability and the extra time available for decision-making.
- Negotiable & Lower Price
While lacking developer promos, secondary properties may occasionally be more economical than brand-new units. A skilled real estate agent can assist in negotiating a favorable price, ensuring excellent value for your investment.
Cons:
- Renovation Costs
The drawback of acquiring a previously inhabited or leased property is potential renovation expenses. The extent of refurbishment depends on the unit’s age and the previous owners’ upkeep. For units exceeding 10 years, budgeting for repairs and renovations is advisable.
- Older design
Depending on the property’s market tenure, modern and cutting-edge designs may not be available.
- Less flexible payment plans
Unlike the primary market, the secondary market lacks access to the flexible payment plans offered by developers.
Bottom-Line
In summary, both off-plan and secondary properties come with their own set of pros and cons. Your decision between the two hinges on your financial situation, needs, and risk tolerance.
Now that you’re aware of key considerations in each market, explore over 100s of off-plan and secondary properties for sale on Mayfair Properties.
For additional guidance before jumping into your property-buying journey, peruse our top tips for purchasing property in Dubai like a professional!
