Let me explain how the Dubai real estate agent ecosystem actually works.
Agent commission structure:
- Off-plan (new development): 5-7% commission from developer
- Secondary market (completed property): 2% commission
If you're an agent and someone walks in wanting to invest $1,000,000:
- Off-plan sale = $50,000-$70,000 commission
- Secondary sale = $20,000 commission
Which one do you think they'll push?
This isn't conspiracy. It's just incentives. And incentives explain behavior
The off-plan pitch sounds compelling:
- "Launch price" — implies discount
- "Payment plan" — only 20% down
- "Projected yields of 8-10%" — sounds great
- "Brand new, modern finishes" — no renovation needed
- "Appreciation during construction" — passive gains
Here's what they don't tell you:
1. You're buying at retail (or above market)
Developers price for profit. Launch prices aren't discounts — they're carefully calculated to maximize developer returns. By the time you buy, their margin is already built in.
2. Zero income for 3-4 years
Your capital sits dead during construction. No rental income. No compounding. Just waiting.
3. Completion risk
Developers delay. Sometimes significantly. Your 2026 handover becomes 2028. Your cash flow projections? Worthless.
4. Handover competition
When your building completes, 500 other units complete too. All hitting the rental market simultaneously. All those investors undercutting each other to fill their empty units.
5. Unproven demand
The building has no track record. No reviews. No established rental rates. You're guessing.
6. "Projected yields" are fiction
Brochure numbers come from developer marketing departments, not actual rental data. They're designed to sell units, not predict reality.
Meanwhile, in the secondary market:
- Motivated sellers (divorce, visa issues, liquidity needs) sell at 10-15% below market
- Property is completed — cash-flowing immediately
- Building has track record — real rental data, real reviews
- No completion risk
- Known service charges
- Refinanceable today
But agents don't push secondary. Commission is lower.
The math that matters:
Off-plan at $1,000,000 with 4-year wait:
- 4 years of zero income = $0
- Handover competition depresses initial rents
Secondary at $850,000 (15% below market) generating 10%:
- 4 years of rental income = $340,000
- Built-in equity from day one
You're $340,000+ ahead before the off-plan investor even starts.
Next email: How to actually find these secondary market deals at 10-15% below market.
Arman
P.S. — I'm not saying off-plan never works. I'm saying the incentives are stacked against you, and for most investors, secondary is the smarter play.