Dubai: Got $1 million to put up as down payment on your next home? Or $2.7 million?
In Dubai, at the Palm Jebel Ali, that’s exactly what investors are doing as they commit a 20 per cent down payment on their home. The first homes on Dubai’s new island went on sale recently and the stage is now set for the release of the second set.
In putting up these sums for their reservation forms, these buyers could be part of a new record setting – of being part of the biggest down payment made on an offplan project of this scale and with these many property releases at the same time.
The typical down payment on offplan buying is 5-10 per cent currently – by straight away asking for 20 per cent from buyers, Palm Jebel Ali sure knows its buyers and the kind of demand that comes with them.
The move, market sources say, is to make doubly sure that only ‘serious’ buyers sign up for the bookings. Of course, that they need to show the funding for it immediately is part of the process.
“From the moment of its relaunch earlier this year, this Dubai island project was marked for instant success,” said an analyst. “Setting the down payment at 20 per cent for these super-premium beachfront homes shows the confidence. Now that the first release has been a spectacular success, the new releases will only help feed more demand.”
Of the units released so far, the price tags are from Dh18 million to Dh50 million plus. As per the initial feedback from the markets, the first homes will likely be delivered some time in 2027.
Interestingly, the full payments on these homes need to be paid by the time of the handover. “It seems there is none of the post-handover payment option on the releases so far,” said the analyst. “The split seems to be 20 per cent down payment, 60 per cent through the construction phase, and the balance 20 per cent on handover.”
Other down payment options
In the Dubai property market, the typical down payment remains in the 5-10 per cent range. Only in the super-premium and niche offplan launches are developers asking for anything close to 20 per cent. But in these cases, this applies to a limited number of properties in that project – and nowhere near to what the Palm Jebel Ali will be building. (To get a feel of the scale involved, it’s twice the size of the Palm Jumeirah. And with all the accompanying complexities of building it up.)
On luxury ready homes being sold, 20 per cent down payments are command. A quick check of offplan sales shows that the 20 per cent is currently being asked for a penthouse valued in the hundreds of millions of dirhams. On the Palm Jumeirah, there is a new tower where similar requirements are there. Again, these are more one-offs than the general rule.