Real estate experts confirmed that reselling a property on the map or on the plan, or what is known as “resale” before the project is completed, is a practice that exists in the real estate market, as it is a type of investment to achieve a quick profit.
They explained to “Emirates Today” that the percentage of returns achieved from reselling off-plan properties depends primarily on the location as a major factor in achieving these profits, in addition to the reputation of the real estate developer and the quality of the real estate project.
While real estate experts explained that the goal of buying a property off-plan and then reselling it is to benefit from the price difference, as prices on-plan are often lower than ready properties, they warned of potential risks such as delays in project delivery, real estate market fluctuations, and rising interest rates.
A real estate expert also presented another point of view, describing the resale of under-construction properties as “speculation,” saying that it is against the nature of real estate investment, and that whoever makes profits from it does so due to an uncertain coincidence.
He stressed that investment in the real estate sector is done by purchasing the property, then renting it, and benefiting from the rental income and high returns. With time, and with urban development, there is an increase in the value of the property, and therefore, this is the correct investment to achieve total rental and capital returns.
investment
In detail, Ismail Al Hammadi, founder and CEO of Al Rowad Real Estate Company, which specializes in real estate consulting and marketing, said that the profit from reselling a property under construction has been present in the real estate market since its beginnings, as it is a type of investment to achieve quick profit.
“This situation has doubled in recent years, especially after the Covid-19 pandemic, as demand for villas and luxury properties has increased, and the market has witnessed several cases of investors who have achieved gains of up to 50% or more of their investments in properties that were purchased off-plan and then resold, especially properties located in high-demand areas such as Palm Jumeirah or Dubai Hills Estate,” Al Hammadi added.
He explained: “The price of a two-bedroom apartment when the projects were launched in these two areas was around 1.2 million dirhams, while it was resold for up to 2 million dirhams, and it is still on the plan.”
Al Hammadi stressed that the percentage of returns achieved from reselling off-plan properties depends primarily on the location as a major factor in achieving these profits, in addition to the reputation of the real estate developer and the type and quality of the project.
“The goal of buying off-plan properties and then reselling them is to benefit from the price difference, as off-plan prices are often lower than ready properties. Here, the buyer can make a profit when reselling, even in the early stages of the project, especially in areas where demand is high. This is what Dubai is currently witnessing with the increasing population and the increasing number of foreign investors, which increases demand for real estate and enhances its value over time. This has expanded the opportunities for investors to make profits from reselling off-plan or map properties,” he added.
Big gains
For his part, Chairman of the Board of Directors of Al Waleed Investment Company, Mohammed Al Mutawa, said: “The real estate market in Dubai has achieved great gains from selling properties off the map, known as ‘resale’, and there are also profits being made, especially for projects that were launched more than a year ago,” noting that those who bought at that time achieved profits exceeding 20%.
Al Mutawa stressed that the location, developer name, and nature of the place are factors that affect the profit margin, confirming the existence of a large sales force in the Dubai real estate market.
an opportunity
In this regard, Asmaa Mowafqi, Public Relations Manager for Sales at Peace Home Real Estate Development Company, told Al-Emarat Al-Youm: “Investing in under-construction properties is a profitable opportunity for investors through resale.”
“Investors buy the property at a low price during the construction phase, supported by easy payment plans offered by many projects. As the property’s delivery date approaches, its value increases significantly, allowing it to be resold at a profit that usually ranges between 10% and 30%. In some special cases, profits may reach 50%, especially in luxury projects or properties in prime locations, within a period ranging between three and six months,” she explained.
She stated that the factors that affect the success of a “resale” deal include location, as properties located in emerging areas or witnessing high demand are more profitable, in addition to the reputation of the real estate developer and the level of trust he enjoys in the market, which greatly affects the value of the property when resold.
She also pointed out that “timing” is an important factor in the success of “resale”, as it is preferable to wait until the delivery date approaches, or the market improves, so that the value of the property increases, noting that market conditions and supply and demand factors have a direct impact on prices.
Mowaffaki warned of some risks in this type of market operations, saying: “Despite the potential large gains, investors face potential risks such as delayed project delivery, real estate market fluctuations, and rising interest rates. Therefore, it is necessary to conduct careful research and choose the right projects to ensure profitable returns.”
Location importance
In this regard, Raad Ramadan, General Manager of Awad Gargash Real Estate Company, said: “Resale or resale of Dubai real estate is characterized by the presence of profits, but at a rate of 10%, and may reach 15%,” noting that it depends on the location and the infrastructure leading to the location.
He added: “Some sites achieve profits of up to 100%, such as Palm Jumeirah, which can be said to have recorded imaginary profits, while the percentage of profits and gains varies from one region to another.”
Ramadan stressed that the infrastructure enjoyed by Dubai in particular and the UAE in general, and the laws set by the government to guarantee the rights of investors, in addition to the contribution of the banking sector, helped achieve strong profits in the real estate market in Dubai.
coincidence
In contrast, the Managing Director of Harbor Real Estate Company, Muhannad Al-Wadi, presented another point of view on resale in the real estate market, saying that resale in under-construction properties is considered “speculation.”
He added: “The real estate sector is a long-term investment. You buy it, you are patient with it, you rent it, and then you sell it at the right time. However, buying a property under construction and selling it after paying the first payment to make a profit is speculation, and it is against the nature of real estate investment. Whoever made a profit from that did so because of an unguaranteed coincidence.”
Al Wadi explained: “Investment in the real estate sector is done by purchasing the property, then renting it out, and benefiting from the rental income and high returns. With time, and with the urban development and strategies implemented in Dubai, there will be an increase in the value of the property. Therefore, this is the right investment to achieve total rental and capital returns.”
Al-Wadi criticized some of those who appear on social media platforms, presenting themselves as experts, and saying that this is the right way to achieve revenues, stressing that these are empty promises. He said: “Unfortunately, it is a very bad new phenomenon that has appeared on social media.”
short term investment
Tariq Ramadan, CEO of Malak Real Estate Company, said that “resale” in real estate is for some desirable projects, especially for some well-known and major developers whose projects are sold within a day or two, and enjoy high demand.
He added: “Prices have now risen significantly, and therefore, the chances of making profits, compared to those who bought a year or two ago, are less, given that prices have reached their highest levels,” stressing that this is not considered (speculation), or buying and selling within days or months, but rather a short-term investment.”
Ramadan continued: “Some major projects by well-known real estate developers witnessed a significant increase in prices and achieved profits, but there are projects where prices did not increase.”