For Dubai's new property buyers, is 0.5% for 10 years the best deal?

Dubai: For those Dubai resident-tenants thinking of when they should buy a home for their own use, that time could well be happening now. Especially those residents who lay great emphasis on selecting more affordable options.

In recent weeks, private developers in Dubai have provided options for such investors with 0.5% monthly payment schemes (after a certain down payment). There have also been limited-time offers by a handful of developers even offering zero down payment schemes. Other developers have focused on extended payment terms, especially after the handover. There are multiple offplan buying options offering up to 10-year payment terms.

Now, developers are mixing the best of both offers.

But as 2025 draws closer, the signs are there for a new offer benchmark on an offplan property purchase, with a leading developer offering deals on 0.5% monthly payments extending over a 10-year period. Others could soon follow suit, because it offers potential buyers the extra levels of flexibility on both what they need to pay each month and the time they need to pay it off.     

“Danube’s 0.5% and 10-year offer (on a new project) has set the stage for other developers to make affordability the centerpiece of their new strategy,” said Hanishka Gehani, Director at Zabadani Real Estate.

“Helping the cash flow of potential buyers is the new ‘affordability’ factor that can spur property sales in Dubai. We have seen other developers offer generous payment plans, but Danube has taken it to next level, such that end-user buyers don’t need to resort to banks financing.”

Property market sources say developers are clearly not in the mood to rest on what they achieved in 2024, when all manner of property market records were broken and reset. Often within weeks of a new high being reached. Whatever be the case, 2024 should go down as the best year for offplan in Dubai.

But the time has come to look at what 2025 could have in store. Mortgage rates on new loans have dropped after the three interest rate cuts by the US Federal Reserve and mirrored by the UAE Central Bank. Further cuts in 2025 could well be limited, according to the Fed.

Enough of a reason why developers in the UAE need to up their game. This is where a renewed focus on getting more end-user buyers will help.

“There is still a vast pool of residents who are renting in Dubai, who could well be ideal candidates to buy a Dh1 million or Dh2 million apartment for their own future stays,” said a developer. “But they may require an extra set of incentives to buy. Helping to manage their cost of buying and payment is one way we as a developer can help.

“This is what we did by offering 0.5% a month payment schedules. There are genuine end-users who have signed up for this.”

If this focus continues, 2025 could well be one where end-users are back in action in Dubai’s property market. Just as they were in 2021…