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Dubai’s real estate market is experiencing a surge in off-plan property sales, but recent practices among real estate agents have raised concerns about transparency and ethical standards. The allure of off-plan projects has prompted agents to adopt questionable practices, sparking debates about their impact on the market’s integrity.
Why Agents are Chasing Off-Plan Projects in Dubai?
In the bustling Dubai real estate scene, agents are increasingly prioritizing off-plan property sales over ready properties. In 2022, there were 17,494 deals in off-plan units, totaling AED 39 billion (more than USD 10.6 billion). The percentages rose by 212.6% and 127.1%, respectively, in comparison to 2021.
This shift is primarily driven by lucrative incentives and commissions offered by developers. Agents find off-plan sales more enticing due to several reasons. Firstly, marketing off-plan properties involves smoother presentations, and encountering fewer objections compared to selling completed properties that often face numerous inquiries and objections.
Additionally, off-plan projects allow agents to secure significant transactions with smaller initial investments, swiftly earning substantial commissions. The allure of higher commissions from off-plan sales, often three to five times more than ready property sales, motivates agents to focus on these projects.
Are Off-Plan Projects a Good Investment Option?
Off-plan projects are attractive to investors due to their potential for higher returns. They offer the opportunity to buy properties at a fraction of their total value, allowing investors to benefit from appreciation once the project is completed. However, there are risks involved, such as project delays or changes in market conditions affecting the property’s value.
Why Consult an Agent While Buying Off-Plan Property?
Consulting a knowledgeable agent remains crucial when investing in off-plan properties despite the market’s allure. Agents can provide valuable insights, assist in navigating the complexities of off-plan purchases, and offer guidance on potential pitfalls. However, recent trends, such as agents refusing collaboration with others or introducing ‘top-ups’ to transactions, raise ethical concerns and necessitate caution.The Real Estate Regulatory Agency (RERA) faces the task of closely examining these practices to safeguard the market’s integrity. The rise of ‘top-ups’ and reluctance among agents to collaborate could distort market values and create a disconnect between sellers, buyers, and agents. It’s imperative for RERA to enforce compliance with international norms, where both sellers and buyers pay commissions, promoting exclusive representation. This shift would uphold transparency and integrity, fostering a market that protects the interests of all stakeholders.