Case study: Buying an off-plan villa

Duncan Balmbra is buying an off-plan four bedroom villa in the new Falcon City development in Dubai. Currently renting a two bed place, with wedding plans in the air, he wants a larger home to move into once married.

‘At the time it was the biggest house that we could afford. Being off plan made it cheaper in comparison to properties that were already built,’ he says, explaining his reasons for going the off plan route, a decision made by 39 per cent of respondents in our Buying Property in the UAE survey.

While any decision to buy a property is partly an investment decision, his chief reason was as a place to live and, slightly worryingly for his fiancé, to raise ‘the 12 kids I want’. Like many people living in Dubai the couple had found fast-rising rents and unreasonable landlords made getting a mortgage an attractive option.

He found the property by luck, while scanning the small ads in a paper. On speaking to the estate agent he found there was no room for negotiation. Being an off plan property, the price was fixed – unless he would like to make a bulk purchase.

Mortgage woes

But getting that mortgage wasn’t as easy as past experiences in his home country of the UK. ‘It was a very painful process,’ he says. ‘The broker told me anything and was completely incompetent. A process that should have taken just over a week took two months. Four mortgage applications had to be made due to him making mistakes and not being completely honest with us.’

Changing provider wasn’t a worthwhile option though, because of the red tape application processes and lack of competition in the market.

So what was his overall experience like? ‘The banking side of it was very painful, but the people at Falcon City were helpful.’

But the process is still on-going, as delays will mean that if the new schedule sticks, by the time they move in it will have taken two years.

His advice for anyone thinking of buying in the UAE is to be patient, make sure you earn a good salary if thinking of buying in Dubai, because of the high prices and be prepared to do all the leg work and a lot of people chasing.

So would he buy off-plan in Dubai again? ‘No,’ he says. The combination of prices, red tape, and immature, uncompetitive market mean he wouldn’t be rushing back into buy another property in the future.