Why Off-Plan Property Resale is Easier in Abu Dhabi Than in Dubai

The off-plan market in Dubai is currently growing more slowly, but not because demand is decreasing. The problem lies in the amount of cash buyers need. Major developers in Dubai enforce strict payment plans and resale rules that mean many potential buyers simply do not have enough capital to enter the market. Abu Dhabi operates differently, and this difference makes resale there significantly more accessible.

In Dubai, major government-backed developers typically only permit resale after 50% of the purchase price has been paid. Payment plans often escalate to 70% or 80% during the construction phase. You can sell earlier, but only if you have first paid that percentage in full. This creates a substantial financial barrier for anyone looking to take over an off-plan property before the project is completed.

Take, for example, a property worth 10 million dirham (approximately €2.5 million / £2.1 million) in Dubai. You want to resell it for a 1 million dirham profit (approximately €250,000 / £210,000). A new buyer would then need to pay a 2% buyer's fee plus 4% property transfer fee (commonly known as DLD fee). This amounts to approximately 660,000 dirham (approximately €165,000 / £138,000) in additional costs on top of the asking price. In the first and second year, a buyer therefore needs to put around 6.5 million dirham (approximately €1.6 million / £1.4 million) in cash on the table, with millions more due in subsequent years before the property is handed over.

Capital as the Biggest Obstacle

By the third year, according to the payment plan, approximately 70% is due. This means you need 8.6 million dirham (approximately €2.15 million / £1.8 million) in cash for a property you cannot yet live in and cannot even view. Very few buyers have that much capital available and are willing to spend it based on a brochure with renders.

Upon handover, the full amount becomes due, but the property also becomes eligible for a mortgage. From that point, you can essentially enter the market with less capital: a 30% down payment plus associated costs. Cash buyers can also finally view the property at that stage. This capital barrier is the main reason why off-plan prices in Dubai are now rising more slowly.

After the pandemic in 2021, payment plans were lighter, making flipping much easier. That is no longer the case, and market conditions have also changed. The era when you could buy an off-plan property with little capital and quickly resell it is over for many projects by major developers.

If we take the same example of 10 million dirham (approximately €2.5 million / £2.1 million) but for Abu Dhabi, we see a completely different picture. Resale is often permitted there from as early as 20% or 30% paid. Payment plans during construction are typically between 40% and 50%. Furthermore, the property transfer fee is half of what you pay in Dubai: 2% instead of 4%.

Abu Dhabi Makes Entry More Affordable

Take Hudayriat as an example. There, you can transfer a property once 20% is paid. If you want to sell in the first or second year with a 1 million dirham profit (approximately €250,000 / £210,000), a new buyer needs only 3.4 million dirham (approximately €850,000 / £715,000). In the third year, that would be around 4.4 million dirham (approximately €1.1 million / £925,000). In both cases, this is roughly half of what is required in Dubai.

This difference in capital requirements has significant consequences. More people can afford to enter the market in Abu Dhabi, which supports prices earlier. In Dubai, high capital requirements exclude a large portion of potential buyers, which slows price growth despite the demand that certainly exists.

Over the past three years, Abu Dhabi has also launched far fewer off-plan projects than Dubai. That lower supply, combined with increasing demand and more accessible capital requirements, makes resale there much easier. You are not stuck with a property you cannot sell because there are no buyers with the necessary cash.

For those looking at off-plan investment, understanding this difference is important. In Dubai, you can find fantastic projects in prime locations, but the financial barrier to reselling them before handover is high. In Abu Dhabi, the options may be more limited because fewer projects are launched, but once you have bought something, it is much more accessible to exit if the market moves.

Developers in Dubai have tightened their payment plans to prevent speculators from overheating the market. This is an understandable choice, but it does have consequences for market liquidity. Those accustomed to light payment plans and quick resales in 2021 must now adjust to a different reality.

In Abu Dhabi, the approach has been more conservative from the start. Fewer projects, but with terms that make it possible to exit earlier. For some buyers, that flexibility is more important than access to the latest major launch in Dubai. It depends on your strategy and how much capital you have available to commit to a project that will be under construction for years.