Off-plan versus ready

The rule

Both are sold on the same sentence: get in at today's price. The difference is what happens in the years between paying and owning, and that gap is where the entire comparison lives.

What each one actually is

Ready is a building that exists. You can stand in it, read last year's service charge invoices, meet the owners association, see whether the chiller is original, and let it to a tenant the month you complete. You pay the whole price now and you own an income stream now.

Off-plan is a contract to buy a building that does not exist yet, paid for in instalments against construction milestones, registered with the Land Department through Oqood rather than as a title deed. It produces no income at all until handover.

Why money later is worth less, and why that is not the whole story

The genuine advantage of a payment plan is that a dirham paid in three years costs less than a dirham paid today. That is real and it is the argument the off-plan IRR framework exists to quantify. Two plans at the same headline price are not the same price, and a post handover plan can be worth eight to fifteen percent of the headline figure against a front loaded one.

But the same clock runs the other way. A ready unit at a 4.3 percent net yield produces income in every one of those years. An off-plan unit produces none. Over a three year build that is roughly thirteen percent of value in foregone net rent, which the payment plan discount has to cover before the off-plan purchase is even level.

Resist the temptation to net those two numbers off in your head. They arrive at different times and in different sizes, which is exactly the situation percentages handle badly. Lay both out as dated cash flows and compare the internal rates of return. That is not a formality, it is the only way the answer comes out right.

What protects your money, and what does not

Dubai's Law No. 8 of 2007 is better than most jurisdictions and worth understanding precisely.

Every project has its own escrow account. Purchaser payments and any project finance must go into it. The account is dedicated to that project's construction, and payments in it cannot be attached by the developer's other creditors, which is the provision that matters if a developer gets into trouble elsewhere. After the completion certificate the escrow agent retains five percent of the account value and releases it to the developer one year after the units are registered to buyers.

Note what that protects and what it does not. It protects your money from being spent on a different project or seized by an unrelated creditor. It does not guarantee the building is delivered on time, delivered to the specification in the brochure, or worth what you agreed to pay when it finally arrives.

The risk nobody prices

Off-plan units hand over in batches. On handover day, several hundred near identical apartments become available for sale and for rent in the same tower in the same month, and every one of the investors who bought for the flip is trying the same exit at once.

That is a structural feature of the product, not bad luck, and it is the single most common reason an off-plan purchase that looked good on paper disappoints. The ready market has no equivalent.

The honest summary

Off-plan suits a buyer with a long horizon, no need for income in the meantime, tolerance for delay, and a genuine price or plan advantage they have actually calculated rather than been told about. Ready suits a buyer who wants the income to start, wants to inspect what they are buying, and would rather pay a premium for certainty than be paid for uncertainty.

Neither is the smart choice in general. The one that is wrong for you is the one you cannot fund if the timeline slips by two years.

The arithmetic

Where it breaks

• It assumes handover happens on schedule. Build a delay case at plus twelve and plus twenty four months and see whether the answer survives it, because a delayed handover pushes every rent receipt back while the payments already made stay where they are.
• The escrow law protects the money from misuse, not the buyer from a bad purchase. Reading it as a guarantee of delivery or of value is the most common misunderstanding in the market.
• Comparing a discounted off-plan price against today's ready price ignores that the ready unit will also have moved by handover. The comparison has to be against the ready market at handover, which nobody knows.
• Off-plan service charges are estimates until the owners association is running. The first real invoice is frequently higher than the projection used to sell the unit.
• The handover glut is not modelled by any standard IRR. If your exit assumes selling within a year of handover, that assumption deserves its own stress test.
• Mortgage availability differs. Financing a ready unit is straightforward, financing an off-plan purchase before handover often is not, which changes what you can actually afford.

When to use it

Before signing a payment plan, and specifically before accepting any comparison made in headline prices. Also whenever a plan is presented as a discount without the discount having been calculated.

Sources

1. Dubai Law No. 8 of 2007, escrow accounts for real estate development
2. Dubai Land Department, Oqood and off-plan registration
3. Dubai Land Department, fees and charges

Last reviewed 26 August 2026. Commercial relationship disclosure: the author works in Dubai real estate brokerage. See the disclosure standards. Disclosure standards.