Glossary / Property

Off-plan

Off-plan means buying a property before it is built, paying in instalments against construction milestones and taking ownership only at handover, which in Dubai is registered through Oqood rather than an immediate title deed.

The attraction is the payment plan: money paid later costs less in present value than money paid today, and a post handover plan can be worth eight to fifteen percent of the headline price against a front loaded one.

The cost is time without income. A unit under construction pays nothing while a completed one is collecting rent.

Where people get it wrong

Comparing an off-plan price against a ready price as though they are the same kind of number. They are cash flows at different dates and only an IRR compares them honestly.

The framework behind it Off-plan versus ready sets out the rule, the arithmetic and where it breaks.

Read the framework

Related terms

Oqood Oqood is the Dubai Land Department system that registers off-plan property sales contracts before a title deed exists, creating an official record of the buyer's interest during construction. Escrow account In Dubai, an escrow account is a project-specific account required by Law No. 8 of 2007 into which all off-plan buyer payments and project finance must be deposited, dedicated exclusively to that project's construction and protected from the developer's other creditors. Handover Handover is the point at which a completed off-plan unit is delivered to its buyer, the final payment falls due, the title deed is issued and the service charge begins. Payment plan A payment plan is the schedule of instalments by which an off-plan property is paid for, and because money paid later is worth less than money paid today, two plans at the same headline price are not the same price.

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