Property handover and its evolution in Dubai

 

If you want to know about the service charges and how you can negotiate with your Developer and how can you protect your investment? Then check out part 1.

Your Guide to Buying off-plan property in Dubai (Part 2)

What do you need to learn about the new wave of property handover for the coming 5 years in Dubai?

The good news is that Developers that sold their projects based on post-handover payment plans will be pushing very hard to complete their projects on time if possible.

So what does that mean for investors?

Property Payment Plans have evolved drastically over the past decade in Dubai. Originally the vast majority of off-plan properties were selling based on equal payments during the course of the project construction. The market then started seeing payment plans of 50% during construction and 50% upon handover, which have again evolved into payments up to 80% on handover.

But the 80% payment on handover was only the beginning as towards the end of 2016 we started witnessing post-handover payment plans that continued to evolve until some developers started offering 10-year post-handover payment plans. Which means that developers will only start receiving their post-handover payments once they receive the completion notice from Dubai Municipality; even if that meant that investors may receive their unit keys 6 months from handover.

So what does this mean?

·      Your post-handover payment will start prior to having your property in a ready to move-in or rent out condition. If you are an investor, this may impact your cash flow drastically which will also affect your returns on your invested equity.  

·      Your service charges will also start as early as you receive the handover notice from your property developer. (To learn how to negotiate Service Charges and How to Protect your investment on off-plan properties click on this link.

·      With many units being handed over at the same time, it is essential for you to:

o   Get your property handover appointment as early as possible.

o   Get your property snagged and inspected by a professional team of engineers, not by real estate brokers. Sign-up for our engineered snagging services.

o   Push and follow up with your property developer to rectify the defaults.

  • Receive your Key and move in, or assign a professional agent to rent-out and to manage your property.
  • Seek unbiased professional advice. Sales people at any developer’s office have one single mandate and that is to sell every and only projects developed by their company. Seek professional advice from an independent professional real estate consultant.

A quick overview about the author: Firas Al Msaddi

I enable real estate investors to make well-educated investment decisions by providing a simplified set of undeniable facts that form the backbone of each and every investment opportunity I recommend.

With over a decade of real estate experience, I offer investors educational, factual and informative content grounded in my solid market understanding and my ability to read market trends. Look beyond the lifestyle images and videos produced by property sellers.

Founder & CEO of FÄM Properties     

Dubai Land Department – Government of Dubai Award Winning Agency 2017/18 and 2018/19

With over 10 Years of in-depth real estate experience, he has executed over AED 10 Billion worth of sales transactions in the Dubai Real Estate Market

Firas Manages a real estate investment portfolio for ultra-net-worth individuals as well as institutional investors for over AED 2 Billion

Author of Straight Property Talk

Author of Straight Life Talk

Public Speaker

Government Award Winning – Dubai Land Department – The highest number of Sales Transactions in Dubai for 2017/18 and 2018/19.

A serial entrepreneur that has ventured into other industries: Founder & CEO of FÄM Living, FÄM Interiors, FÄM Outdoor Media and Media Force Outdoor.

Instagram: Firas_Al_Msaddi

Linkedin: Firas Al Msaddi

[email protected]



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