Off plan
Escrow largely solved developer risk. In this cycle the weak point in an off-plan contract is the buyer, and that is also where the opportunity sits.
When I started in this market, off-plan risk meant developer risk. In 2008 and 2009 buyers paid deposits on towers that were never built, and many projects stalled or were cancelled. The rules that protect buyers today — escrow accounts under Law No. 8 of 2007, and the interim register for off-plan sales under Law No. 13 of 2008 — were written as that cycle peaked and broke.
Those rules work. Developer risk has not disappeared, but it is no longer the main thing I worry about when a client buys off-plan. The risk has moved to the other side of the contract.
The buyer is now the weak point
Off-plan made up 72% of Dubai residential purchases in the third quarter. Many of the off-plan buyers of 2024 and 2025 were investors who bought more than one unit on a small deposit, planning to sell before handover or refinance at completion. That worked while prices were rising. It works much less well in a market where values are around 10% below February and completions are arriving in volume.
Cavendish Maxwell counts 162,500 homes scheduled to complete in 2027. Many of the payment plans sold in the last two years leave a large share of the price due at handover. An investor who planned to sell before that date, or to fund it with a mortgage at a higher valuation, now has a harder choice.
The law is clear about what happens if they cannot pay. Under Article 11 of Law No. 13 of 2008, as amended in 2017, a buyer in default receives a 30-day notice through the Dubai Land Department. If the project is more than 80% complete, the developer can keep the contract and pursue the full balance, or terminate and retain up to 40% of the contract value. Between 60% and 80%, it can terminate and keep up to 40%. Below 60%, up to 25%.
A payment plan is a commitment to the full price. Some investors are going to learn that in 2027.
What this means if you are buying
My advice runs against how off-plan is usually sold.
Look at last year's contracts before this year's launches. Developers rarely cut list prices in a softer market. They protect the headline number and move the terms instead. The investor who bought in 2024 and now needs out has no such pride. A resale of an existing off-plan contract, bought from a motivated seller, is often cheaper than the developer's current price for the same building — and you inherit a project that is further along. This is where I expect most of the real value in off-plan over the next eighteen months.
Treat the payment plan as the price. A plan with 70% due after completion is worth something; a cash payment is worth something too. Ask what discount the developer gives for paying faster, and compare the two properly. When developers compete for buyers, as they are now, the terms are where they move.
Only buy what you could complete without help. If your plan depends on selling before handover or on a bank valuing the unit above your contract price, it is a speculation. Banks lend against their own valuation at completion. If values have moved below what you agreed to pay, the gap is paid in cash.
Check the developer's record, not its brochure. Compare the handover dates it promised on its last few projects with the dates it delivered, and how it treated buyers when it was late.
Count what completes next to you. More than 82% of the homes due in the second half of this year are apartments. The rent you achieve on day one depends on how many similar units are handed over in the same community at the same time.
Where I think the opportunity is
I am not negative on off-plan. In a well-run project, priced sensibly, it remains one of the better ways to own new stock in Dubai, and launches have slowed — about 28,000 units in the first half of this year, against roughly 102,000 a year earlier — which gives developers less room to oversupply in the next cycle.
But the buyers who did well after 2008 were not the ones who bought new launches in 2009. They were the ones with cash who bought from people who had to sell. The structure is different this time and the correction is milder. The principle is the same.
If you have the capital to complete, and the patience to wait for the right seller, the next two years in off-plan may be more interesting than the last two.
Sources
- Cavendish Maxwell Q3 2026 data, via Gulf Business
- Supply and launch data, Cavendish Maxwell via IndexBox
- ValuStrat Price Index, via Property Portfolio Investor
- Law No. 19 of 2017, Dubai Legislation Portal
- Cover photo: Ben Koorengevel on Unsplash