Abu Dhabi CityScape – Should You Buy Off-Plan?

Don’t like the look of the real estate market right now? Buy now and take advantage of the market in two to three years by buying off-plan. In 2016 Dubai sold as many off-plan units as built ones. Off-plan is back in vogue.

So what are the pros and cons of buying off-plan in this newer more confident market and what do you need to look out for?


Now because you are paying for something you can’t take possession of yet developers will incentivise buyers to put their money down by offering a discount on final price. You should be getting the end product cheaper than if you waited for it to be built.

This price incentive is a big draw for investors in particular and is even greater in a rising market.


Most banks will only finance 50% of an off-plan unit so developers are having to offer very generous incentives to get retail (non-investor) buyers to part with their money. A great example are the array of payment plans in which customers pay a deposit (2.5% to 10%), followed by instalments in the run-up to handover. Total payments upon handover will typically be 25/30% and the final 70% will be financed. Some projects in Dubai are even financing the units after completion as well i.e. you don’t have to pay the full balance upon handover, some payments are due even after completion.

Attractive financing is very good for retail investors who can’t afford the 25% deposit needed to get financing. Payment schemes allow a small upfront payment then nearly three years to save the rest, and on handover you will need to get finance for the balance.

TDIC is offering as little a a 2.5% deposit on its off-plan villas and apartments. Call Helen for details on 0506602605.


One of the great things about off-plan sales is that you get to choose your unit from a wide range. You can select the type, view, floor, in some countries off-plan buyers can also select the finishings of their units, tile colours, open or closed kitchen etc.


Make sure you are clued up about the timeline of the project so you can plan your finances. You will need to make staged payments through the life of the project and be able to get a mortgage at the end of it. Talk to your bank about your eligibility for a mortgage, if you can’t get one when the property is handed over you could lose your deposit for non-completion.

Completion Risk

When you buy off-plan you are taking a risk that your unit will not be completed. Several projects sold off-plan in 2007-2008 were never built and investors still struggle to get their money back. The larger government back developers however largely delivered on their units and that is why the likes of TDIC, Aldar and Aabar are still able to sell off-plan now. The New regulations by the Abu Dhabi Real Estate Regulator mean that purchase monies are now paid into and escrow account, and can only be released in stages. This adds a huge amount of security for would-be buyers.

Price Risk

When you buy off-plan you are taking a risk that your unit, upon completion, will be worth what the developer said it would be worth. Inflation in Q2 of 2017 is running at around 3% so that gives you a 9% rise over three years even with no actual market appreciation, which is some buffer, but real estate in the UAE is a fickle mistress.

Buying off-plan is a great investment if the market goes up and your property is worth a more than you paid for it. If the value of it does go down you may not find a bank able to lend you the remainder without you adding more capital.


A final note and one overlooked so often it makes me want to pull my hair out. If your unit is being handed over to you have it professionally snagged. The number of people who wander round it by themselves and saying “it looks ok” is incredible. Get a professional in to test the piper, electricity, damp, fixtures, fittings etc thoroughly, it will save you thousands.

If you have any questions on this Guide please email guides@cpestateagents.com. If you are interested in buying a property or selling any of your current portfolio please email sales@cpestateagents.com. You can always call us from 7.30am to 9.00pm seven days a week on 800CPEA (2732).

Ben Crompton is an ex-lawyer and the Managing Partner of Crompton Partners Estate Agents LLC which has branches in Abu Dhabi and Dubai. Follow him on Twitter @benbcrompton

Ben Crompton

Managing Partner


Call – +971 50 6145199


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