Investing in Dubai off-plan real estate - risks and opportunities

One of the most popular areas for capital investment in Dubai remains off-plan real estate. However, before buying apartments at the excavation stage, it is worth carefully weighing the pros and cons. We offer to study this market to further warn your clients from thoughtless actions.

How Dubai attracts investors

Stable economy. Dubai is the economic hub of the region, offering stability and business advantages. The headquarters of 65% of Fortune 500 Arabia companies are located here. The emirate's GDP grew by 3.5% in 2023, beating forecasts.

High returns. Profit from renting out real estate in the emirate often exceeds the indicators of other cities. According to CBRE (Global Commercial Real Estate Services), the average gross rental yield of apartments in Dubai in Q1 2024 amounted to about 5.5% - 6.5%. In popular tourist areas of the emirate, earnings can reach 8-10%.

Population and tourism growth. The emirate continues to attract new residents and tourists, which increases the demand for housing. According to the city's development plan, the emirate's population should increase from 3.5 million to 5.8 million by 2040. 

Favorable tax environment. Dubai maintains a favorable tax regime for investors. As before, there is no annual property tax. A one-time transfer of ownership tax (DLD) of 4% of the value of the object is charged at the time of purchase.

Modern Infrastructure. The emirate has a developed infrastructure, including transportation, communications and entertainment. In 2024, the government has allocated significant funds to improve the transportation network, including the expansion of the metro and the construction of new roads. By 2030, it is planned that 25% of urban transportation will be unmanned.

Opportunities

Buying at the best possible value

This is perhaps the most obvious and tempting factor. At the start of sales at the excavation stage developers offer the most favorable prices per square meter. The difference with the price of the finished object can reach 15-30%, and sometimes more, depending on the project and location. This is the investor's potential income when reselling after construction is completed. 

Imagine: you buy an apartment for AED 2 million, and after the building is completed, its market value increases to AED 2.5 million.

Flexible payment plans

Many developers in Dubai offer favorable payment options that allow you to spread the financial burden over the entire construction period. Often the down payment is as little as 5-10% of the cost of the property, with the remaining amount being paid in stages as the construction work progresses or even after the property is commissioned. Interest-free installments allow investors to effectively manage their finances and invest in several projects at the same time, without “freezing” a large amount of capital. Some payment plans provide for installments of up to 70% of the cost after the keys are received (post handover).

Royal Regency by Al Seeb is a prestigious residential complex in Business Bay with Hi-Tech apartments and views of the Dubai Canal and Burj Khalifa. Residents have access to a wide range of state-of-the-art amenities. Convenient post handover installment is designed for 36 months with a monthly payment of 2%, down payment - 10%. Handover of the object is already in October 2025!

Price: from AED 2,016,000

Date of completion: Q4 2025

Aria Heights by SRG is a sophisticated apartment complex in Jumeirah Village Circle. All apartments have open floor plans, panoramic windows and European brand appliances. The complex has amenities to suit every taste. The booking fee in this project is only 5%, and installment payment is available for 12 months after handing over the keys (40%).

Price: from AED 1,192,888

Date of completion: Q4 2026

Ir1dian Park 2 Living by Object1 is an elegant residential tower in the quiet community of Jumeirah Village Circle. The development showcases premium amenities, with apartments featuring built-in appliances and panoramic windows. The project offers a payment plan with an installment for 20 months after completion of construction and payments of 5% every 3 months. The down payment will be 10%.

Price: from AED 827,530

Date of completion: Q2 2027

Timez by Danube is a modern residential building in Dubai Silicon Oasis that offers fully furnished residences with over 42 world-class amenities. The down payment in this project will be 10% and the post handover installment is for 30 months with a monthly payment of 1%.

Price: from AED 778,000

Date of completion: Q2 2028

SOLA Residences by Centurion is an aesthetically pleasing residential project in Wasl Gate neighborhood. Residents will enjoy spacious apartments with built-in appliances, premium amenities and favorable location. The developer provides a 50/50 payment plan, of which 5% is due upon booking, 45% before completion and 50% upon handing over the keys.

Price: from AED 1,044,000

Date of completion: Q4 2027

Potential for growth 

Property values in Dubai often rise as the neighborhood gets closer to completion. New roads, shopping malls, parks and other infrastructure that appear in the neighborhood increase the rating of the area in the eyes of buyers and, consequently, the price of housing. Explain to your client that by investing early, he or she is investing not only in a specific property, but also in the development potential of the entire neighborhood.

Wide choice

At the start of sales, investors have a chance to choose from the whole range of offered objects: different layouts, floors, views from the windows. This is especially important for those who plan to resell, as it allows them to choose the most liquid options that are in high demand on the market. For example, apartments with a sea view, with a balcony or located on the upper floors, as a rule, are sold faster and at a higher price.

Individual approach

Some developers offer a choice of finishing materials, colors and even the configuration of apartments. This allows investors to create a unique offer that meets the tastes of the target audience and increases the popularity of the object on the rental or resale market.

Prospects for rental income

After completion of construction, the investor can rent out the property and receive a stable passive income. High tourist attractiveness of Dubai provides demand for rental housing, especially in areas with developed infrastructure. Earnings on rent in the emirate can significantly exceed similar indicators in other major cities of the world.

Risks

However, like any market, investing in off-plan real estate in Dubai involves certain risks that need to be taken into account.

Construction delay risk. Despite strict controls and high standards, force majeure, financial difficulties of the developer or logistical problems can lead to a disruption in the timeline. 

It is important to realize that even in the most promising city like Dubai, there is no guarantee of perfect compliance with construction deadlines. Carefully checking the developer's reputation, reviewing contract terms in detail, and understanding the potential risks associated with a particular project are key steps to minimize the negative effects of delays and protect your investment.

Overvaluation risk. The temptation to purchase an interesting object in a promising neighborhood can cloud the vision, and the investor, giving in to euphoria, will pay a price for the property that does not correspond to its real market value. To avoid overpayment, it is necessary to conduct a thorough and independent analysis of the market. Study the dynamics of prices in the selected area, compare the cost of similar objects, assess the reputation of the developer and the prospects of infrastructure development. 

How to minimize risks and increase the chances of success (memo for investors)

To successfully invest in off-plan real estate in Dubai, you need to follow a few important rules:

• Choose developer carefully. Research the developer's reputation, experience and financial standing. Pay attention to the reviews of other investors.
• Conduct due diligence of the project. Check all documentation, including building permits, financing plans and contractor agreements.
• Diversify your investments. Don't put all of your money into one project or multiple properties in the same neighborhood.
• Be prepared for the long term vision. Investing in off-plan real estate is usually a long-term investment that requires patience and understanding of the market.
• Consult a lawyer. Make sure to consult a professional who specializes in Dubai real estate before entering into a purchase agreement.

Instead of conclusion

Investing in off-plan real estate in Dubai can be very profitable, but requires careful analysis and a cautious approach. You need to weigh all the risks and opportunities, choose your developer and project carefully and be prepared for the long term vision.