Pre-launch and EOI (expression of interest) system. How does it work in the UAE?

Pre-launch and EOI (expression of interest) system. How does it work in the UAE?

Real estate in Dubai is sought after by potential buyers from various countries. The popularity of housing is determined by the opportunity to obtain a residency permit after purchase, a high return on investment, a stable UAE economy, and many other factors. Property developers are using marketing techniques to offer properties for sale off plan in Dubai. Launch-System is one of this type of tools.


So, what is this Launch-System?

Launch is translated from the English language as "start-up". The word is used in marketing to refer to pre-launch sales. The term is used in various areas of business, regardless of their specifics and scope of action.

A brand-new product of any company, even a major and popular one, needs to artificially draw the attention of potential customers in order to ensure sufficient demand by the time of start of sales. In other words, product launch is the process of informing the target audience about the characteristics of this new product before it enters the market.

Pre-launch and EOI (expression of interest) system. How does it work in the UAE?

Pre-launch property in the United Arab Emirates

In the UAE real estate market, the concept of official launch means the official start of the sale of residential units. The property can be booked at the pre-launch stage, when there is not even a foundation pit on the land where the construction will take place. Developers offer potential clients only 3D images of the property, known as renders.

In this case, a deposit is usually made and an expression of interest is drafted. Some developers call this document a pre-registration.

Immediately after the announcement of the official start of the sale of apartments and villas, the investor signs a sale-purchase agreement involved in the primary market.

Off-plan and pre-launch: differences

Many people confuse the concepts of pre-launch and off-plan, but there is a big difference between them. When you buy off-plan, you become the owner of a housing unit that is at least 20% completed.

Investing in pre-launch is investing in real estate at the stage of the project's release, that is, when there is only a plan for the future home.

The cost of pre-launch housing is 10–25% lower than at the foundation-laying stage. The option of investing in a pre-launch apartment or villa is lucrative because in this case investors have the opportunity to make decent money on the resale of a unit in the shortest possible time.

Pre-launch and EOI (expression of interest) system. How does it work in the UAE?

Is pre-launch always profitable?

Of course, it is more profitable to buy an apartment or house as soon as the developer launches the project. Residential properties in the pre-launch stage increase in value by an average of 30– 50% by the time the building is put into operation.

In order to make a really profitable investment, you need to take a lot of things into consideration when purchasing a residential property: the location must be beautiful, with good ecology and developed infrastructure, and the developer must be reliable. In such conditions, the demand is quickly formed, which affects the housing price.

At the same time, the investor has to understand that not every project has a chance of success. It is possible that the developer will not deliver the housing estate on time, or, for example, the infrastructure of the local territory will not be developed according to the plan. In this case, in order to make a profit from the resale, it is better to wait about 3 to 5 years after the unit is put into operation.

In order to avoid such situation, it is important to select a competent real estate agent, who can find a worthy project. If you don't work with a one-day firm, the company's experts will be motivated to identify a good property for the client because real estate agents, among other things, try to build their reputations, which are crucial to their career prospects and revenue.

Expression of interest

The so-called booking of housing takes place when a buyer signs an expression of interest form during the pre-launch phase, after which the unit is no longer made available to other consumers. Prior to the announcement of the start of sales, the agreement allows for the selection of a residential property. The deposit is typically at least 5% of the property's worth.

Typically, the most desirable housing options are gone even before they hit the market. What causes this to be the case? The construction company will inform realtors of the most lucrative offers in the very near future, perhaps within 7 to 10 days. The investor then books a number of the agent's eligible real estate possibilities, including ones that will shortly be included in the pre-launch. In this scenario, the buyer often pays the majority of the unit's cost after construction is done.

Pre-launch and EOI (expression of interest) system. How does it work in the UAE?

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