Dubai: What sort of property investor are you? Someone who prefers to keep the down payment small? Or are you willing to pay up to half of the property value before handover and then stretch the rest of it over years, even 10 years or more?
Do you want buy now and move in? Or buy offplan and patiently wait for another two to three years for the handover?
Whatever be your buyer profile, developers in Dubai have got it covered. One of the biggest names in the business, Damac Properties, is offering to go as low as 5 per cent on the down payment for an upcoming launch of villas starting from Dh1.49 million. The standard down payment used to be 10 per cent, and with Damac having set down the marker with 5 per cent, expect more developers to join in.
Extended post-payment payment instalments have been there for the last three years, but this time developers in Dubai are offering potential investors an even better deal – pay and get ready to move in starting now. And pay off all the obligations over five- or 10-year periods. There is no shortage of properties to pick and choose from – Dubai is expected to see around 40,000 new apartments being delivered this year, and quite a few of them will be looking to find an owner closer to completion.
In fact, developers extend buyers the option to choose from a range of payment plans – and which then gets reflected in the final selling price. “Pay a higher down payment and clear most of the installments before the handover will be reflected in a lower price point,” said a senior industry source. “Depending on the developer, selling prices are now dictated by the payment plan the buyer is choosing.
“Developers have moved on from offering a limited set of payment options – these days, whatever suits a likely investor best is available. They just need to ask.”
Offplan launches are back in Dubai, whether it is Deyaar launching a Dh700 million plus ‘Regalia’ skyscraper project in Business Bay with a seven-year payment plan, or Prescott Real Estate launching the Dh140 million mid-rise in Al Furjan, with 50 per cent to be paid post-handover. Saudi mega-developer Dar Al Arkan came up with an Italian fashion house collaboration for a residential project on the Dubai Water Canal. It will be the first project in Dubai that will have the fabled Missoni touch on the interiors.
The upcoming Cityscape should see more developers get into full offplan stride, whether with brand new launches or with an extensive makeover of an older one.
No point in waiting
Going by sales transactions, developers will see little reason to wait. The July to September phase was the “best” ever third quarter for Dubai’s property market for sales transaction values. And the best third quarter since 2009 in terms of sales volumes, according to Property Finder’s latest report.
The gap between ready and offplan sales too are narrowing. Between July 2020 and end-March, the vast majority of sales were happening for ready homes or those sold in the secondary market. Offplan was yet to show any signs of health. All that changed from the second quarter onwards.
As of end September, 56.6 per cent of all transactions in Dubai were for secondary/ready properties and 43.38 per cent offplan. If that pace continues, Dubai will need more offplan inventory – and that’s what developers are willing to provide. Even Damac, whose founder Hussain Sajwani has in the past spoken about being cautious with new offplan launches, is busy with new launches and releases.
Get the midmarket moving
According to market sources, payment plans are necessary to fully revive the middle portion of the Dubai property market, the category where prices start from Dh1 million or so. “You don’t hear about payment plans for the Dh20 million, Dh50 million or Dh100 million homes,” a source said. “Those homes are selling without much of an effort – because there are investors with ready money waiting.
“It’s at the mid-end that there is a liquidity issue, which is why developers are doing all they can to make either the upfront payment small or stretch the instalments in the post-handover phase.”
In Dubai, there is a home – and a payment plan –for all pockets…