Dubai: Private developers in Dubai are starting to offer some of the steepest discounts on offplan property sales. These straight discounts on property prices apply both to new launches as well as those from the recent past, as developers compete for buyers before demand for homes in Dubai starts to stabilize.
In recent days, one of the big names among private developers in the city were marketing their launches with a flat 20 per cent price drop. This applied to those who were buying individual units and those looking for bulk buys. Such a straight discount is relatively rare, more so at a time when offplan sales in Dubai are still going strong, with month-on-month advances. Even in the peak summer weeks, demand for offplan remained consistent.
Other developers too have their own price slashes, typically up to 10 per cent. In doing so, they are trying to reassure buyers that they would be getting in at the ‘right’ price and not delay the transaction. Offplan property values are up by 15-25 per cent since 2020 in Dubai.
“Yes, certain developers are offering generous discounts on their latest launches,” said Maryam Kiyani of Homeland Real Estate. “What’s more, these discounts have been met with resounding success as can be seen by the sales transactions.
“Whereas these discounts are still limited to certain private sector developers in Dubai, it’s mostly been to attract investors to newer projects and communities. Depending on the project, location and the developer, we would strongly advise investors to take advantage of such offerings.”
Wherever developers have offered discounts on new launches, they have been met with resounding success. The sales transaction numbers prove it
Will more developers follow with discounts?
As Maryam states, it’s still a few developers who have these discount offers going currently. But if the market starts to stabilize after 4 record years of growth, others may join in. Already, there is talk of demand at the luxury end of the Dubai property market slowing, while the biggest sales action are on properties valued in the Dh1 million to Dh3 million range.
Developers in the past have relied on multiple ways to drum up sales, whether paying the property registration fees to RERA on behalf of the buyer. Or keeping the services charges fixed for the first 3-5 years after handover.
Which is why the straight discount is still relatively new.
These aggressive discounts on offplan property in Dubai is on top of the generous commissions developers have been handing out to brokers for the better 18 months
‘Clear the inventory’
According to Sameer Lakhani, Managing Director at Global Capital Partners, “Aggressive discounts are a way to clear inventory - this is on top of the generous commissions developers have been handing out to brokers for the better part of a year-and-a-half.
“However, these incentives sometimes don’t end well and may signal flagging demand. Especially where some froth in property prices have built up.
“With new offplan launches at a record, investors would do well to look at parts of the Dubai property market where the gap between offplan and ready sales value is at its highest.”
Price cool off
Some industry analysts say that discounts are coming after property prices in Dubai experienced that 15-35 per cent gains. Even in emerging locations, offplan launch prices are higher by double-digits over what would have commanded in 2021 or ’22.
The mix of nationalities that are buying in Dubai never ceases to astonish. With the influx continuing, there is little chance of any oversupply concerns arising in the near- to medium term
Whatever be the case, it’s a time for new buyers to pick up a bargain.
“In certain areas like JVC, Arjan or Dubai South, there is increasing interest from investors to buy private sector built properties,” said Mazz Ali, Sales Manager at Golden Wave Properties. “Newer developers are entering the market all the time and some need to offer incentives in addition to what they offer in the actual property.
“It’s always good for the investor if there is some price competition so that it creates a win-win.”
