Buying a home in Dubai is getting easier as developers offer 0.5% monthly plans
Potential homeowners in Dubai are getting price discounts and even easier payment plans
Dubai: More developers in Dubai are starting to offer monthly payment plans of 0.5 per cent a month as they come up with new strategies to keep the offplan property sales momentum going for longer.
Earlier, the standard monthly payment plan from some of the leading developers in the city was 1 per cent. Now, some of them have started offering it for specific projects while others are going the extra mile by extending the scheme to all their new launches.
Think of it as an easy instalment plan for potential home buyers, especially for those who find getting a mortgage difficult or are not eligible for it.
In recent weeks, developers have also started offering straight discounts on the property price, even up to fairly high levels of 20 per cent off.
These incentives – affordable payment plans and discounts – come as market sources cite potential buyers being concerned about the high entry price on offplan purchases and the fact that handovers on the latest launches are still 3-4 years away. Currently, offplan make up 70-80 per cent of Dubai’s overall residential sales on a monthly basis, with the first six months of 2024 showing record new launches each month.
Payment plans that are now below 1 per cent a month are adding to the impetus for investors to purchase. Especially among those who are buying for the first time.
This is where the 0.5 per cent monthly payment option can help. And it’s not just developers in Dubai who are offering it – the trend is starting to show up in Ras Al Khaimah too, which is another freehold market that’s experiencing a price and demand boom.
“If 1 per cent was the way to get property buyers’ attention 2-3 years ago, now it’s sub 1 per cent,” said a developer. “Current offplan demand has a sizeable number of end-users buying, and this probably one way of making them feel a home purchase can be within their means.
“If after a down payment, a buyer has to pay off Dh1 million, then at 0.5 per cent, the monthly payment comes to just Dh5,000.”
Extending offplan’s dominance
The Dubai master-developers such as Emaar, Damac and Sobha continue to dominate the launch scene, while new entrant Aldar is also making waves. The latter, Abu Dhabi’s biggest developer by some distance, already has had two massive residential community launches and with a third one coming soon.
Against this, other developers have to find ways to compete. Because there are still potential property buyers out there in significant numbers. Not to forget, genuine end-users who want to move from being a tenant to a homeowner. (Sharjah’s freehold in recent times has seen a significant number of end-user buyers.)
“Payment plans that are now below 1 per cent a month are adding to the impetus for investors to purchase,” said Florine Rusu, Managing Director of Market Price Real Estate. “Especially among those who are buying for the first time.
“These monthly payment schemes will help them sidestep the entire mortgage process later on. And even the upfront down payment that comes along with it.”
Between January to end June, there were 134 apartment project launches and 38 villa-type releases. March had the highest number of such launches, with 36, followed by the 34 in May, according to data from Reidin-GCP.
It is no surprise that this under 1 per cent monthly payment trend has also spread to Ras Al Khaimah. And will likely be offered in other emirates as well.
On a price per square foot basis, there were 8 projects offering values of under Dh1,000 psf. And 98 projects had the median price per square foot at between Dh1,000-Dh2,000, while 48 projects were in the Dh2,000-Dh3,000 psf range.
“It is all about the budget capability of property buyers,” said Usman Jameel of GCP Properties. “The latest price sweeteners allow developers to play the role of financiers in getting first-time buyers, especially overseas buyers, for whom mortgage payments are not an option.
“It is no surprise that this under 1 per cent monthly payment trend has also spread to Ras Al Khaimah. And will likely be offered in other emirates as well.”