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Written breakdown

New launches in Dubai: how a sales start works, and when the launch price really is the low one

· Oleg Svyatenko, RERA broker

A launch price in Dubai is usually the lowest within the life of that project, but not necessarily low for the district. The EOI deposit is refundable, so the discipline is simple: compare the opening price with resale stock nearby and with earlier phases of the master plan, and decline if no headroom is left.

How does a launch run, from teaser to sales day?

In stages. The developer releases a teaser and collects expressions of interest, known as EOIs: the buyer places a refundable deposit and joins the queue for choosing a unit.

Brokers are then sent the price list and the floor plans, often literally a day before the start. On the opening day units are allocated in the order of the queue, and on strong projects the most liquid ones go within hours.

Knowing this gives a practical advantage. An EOI is worth submitting only after your own analysis, not under the pressure of 'everything will be gone tomorrow'. And since the deposit is refundable, you can decline if the day-one price comes in above expectations.

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Fix your ceiling price per square foot in advance. It is the best protection against overpaying in the excitement of a launch.

Why do developers start low?

To gather a pool of buyers quickly and to show demand to the bank and to the market. After that the price is raised in stages as construction moves forward.

The classic model is an early-entry discount. The first releases are sold cheaper because the buyer takes on the risks of a long wait and of a location that is not yet built.

As the project approaches completion the price list is, as a rule, indexed. By handover the early buyers see a gain in value before any growth in the market itself.

Whoever came in on the first day of a successful project gets both the best price and the best choice of units. A significant part of the investment return in this market is formed at exactly that moment.

Is the launch price always the lowest?

Within the life cycle of one project, as a rule, yes. Against the district as a whole, not necessarily — and in a hot market the classic logic partly breaks down.

In early 2023, when this was written, developers were announcing new towers, quarters and whole districts every week. With that many launches, not every one is an opportunity.

Some come out straight away at the prices of completed homes in neighbouring districts, so that the developer keeps the whole growth potential for itself. Others start in locations whose maturity is a long way off.

The opening price is therefore always set against two reference points: the resale market in the same location, and the prices of the earlier phases of the same master plan. If a new block costs more than the completed one next door for no clear reason, early entry loses its point.

Who else is buying on day one?

It is a marker of its own. When a significant part of the pool is taken by flippers buying to resell, an overhang of supply forms on the resale market by the time the building is handed over, and it presses on the price.

Projects bought by end users for themselves age more gracefully. The composition of buyers at the start shapes your exit long before the building is finished, which is why it belongs in the analysis alongside the price.

What filter separates a strong launch from noise?

A short one, with five points: the developer, the location and master plan, the price per square foot, the payment plan, and registration with escrow. Experienced buyers run every announcement through it.

On the developer, look at the history of projects actually delivered, the average delays and how the completed buildings are run. Commitments with no history behind them are a lottery.

On location, ask what is already built around the site and when the roads, schools and retail will appear. A district in an empty field can take many years to mature.

On price, a healthy launch leaves headroom for the buyer. On the payment plan, check the share of payments before and after handover, whether there is a post-handover instalment plan, and the size of the first payment.

The project must be registered with the Land Department and the payments must go to an escrow account. That is the basic hygiene of off-plan in Dubai, not a selling point.

Which strategies work with new launches?

Three. The first is early entry with a resale before completion: buy at the start and exit after a year to a year and a half, once the price list has been raised several times.

It works on strong launches but requires knowing the rules: most developers allow assignment only after a set share of the price has been paid. The conditions differ from project to project and are fixed in the contract.

The second is to buy at launch, hold to the keys and let. What matters here is a location with mature rental demand and a post-handover payment plan that is partly covered by the rental income.

The third, conservative one is to buy not the first announcement in a district but the second or third phase of a proven master plan. The infrastructure is already visible, the risks are lower, and prices are still launch prices relative to completed homes.

That route gives up part of the return in exchange for predictability — a reasonable compromise for the first capital placed in Dubai.

The mistakes buyers repeat at launches

The most frequent is buying under the pressure of scarcity: 'the last floor is left', 'the price goes up tomorrow'. Scarcity is a standard sales tool, and a decision made in an hour without comparing the market is rarely the best one.

The second is choosing a unit by the price list and not by the stack. A cheap unit facing the construction site of the neighbouring tower will lose in rent and at resale for years ahead.

The third is ignoring the total cost of ownership: service charges, the registration fee, commission, furnishing. Together those lines noticeably change the net percentage in any yield model.

The fourth is spreading money across several fashionable launches at once in place of one well-selected unit. Diversification works when every asset has passed the filter, not when risk is simply smeared across several doubtful projects.

Frequently asked

What is an EOI, and does it oblige you to buy?

An EOI is an expression of interest backed by a refundable deposit, which gives you a place in the queue for choosing a unit. It does not oblige you to buy: if you decline, the deposit is returned.

Can an off-plan unit be resold before the building is completed?

Yes, by assignment, but usually only after the share of the price set by the developer has been paid. The conditions differ between projects and are fixed in the contract.

How well is an off-plan buyer protected in Dubai?

Payments go into escrow accounts under the supervision of the Land Department, and funds are released to the developer by construction stage. That does not remove the risk of delay, but it protects the money from being used for other purposes.

Is the price always lowest at the start of sales?

As a rule yes, within the life cycle of that project. But the opening price can be high relative to the district as a whole, which is why comparison with resale stock and neighbouring phases is essential.

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