Hadef & Partners report says that Dubai could face boom or bust cycle
Off plan sales need to be regulated a report by Hadef & Partners has said.
The Dubai-based law firm has called for off plan sales to be regulated correctly or they warn that Dubai could face another boom or bust cycle.
Off-plan property sales were the backbone of previous Dubai property deals, with investors buying off plan and then flipping the sale. Sometimes the person who occupied the property could be the fifth or sixth owner.
Investors should be cautious in relation to off-plan property. “Buying off-plan property is still a risky business. Many investors cannot wait to get back to the good old days of 2002 to 2008 and another upward cycle,” Hadef & Partners said in its 2012 report on the legal state of the Dubai real estate market.
“However, if the past has taught us anything, it is that price rises on the back of multiple trades of paper (I.E.: off-plan secondary market sales) can lead to a cliff edge if the projects are not delivered,” it added.
Asked about the future investment preferences, many of the 8,500 respondents to the survey did express desire to invest in property in the next 12 months.
However, only 20% were interested in investing in the UAE and just 12% wanted to buy off plan.