Dubai: Looking to buy an offplan property in Dubai? You could do it on zero down payment.
That’s right, a handful of private developers now offer investors the option to pick up a home with minimal upfront payment. The projects – launched in recent months - from these developers are priced from Dh800,000 and with completion dates some time in 2026-27. If such promotions gain a following with investors, there could be more developers coming up with the zero as a down payment.
In such instances, the property buyers only need to pay for the registration fees and associated costs to the Dubai Land Department. The first payments to the developers would start a good 3 months further down the road, based on the current offers.
What this shows is that developers are leaving nothing to chance to gain an advantage when it comes to attracting buyer attention. Offplan sales in Dubai continued to string together monthly highs this year, and December shows every chance of closing out 2024 as the best year for offplan in Dubai.
While the demand is there, it’s not as easy for developers as it seems. Every 10 days has a new offplan launch happening in Dubai, and for a majority of developers, they need to come up with something extra to bring in the buyers.
This is where a zero down payment offer could help. (The developers who have introduced it are doing so as a ‘limited time’ promotion.)
The zero payment option is one way to ‘speed up’ decision making by investors, market sources say.
The offers will get even more investor-friendly if demand tightens up in 2025 and developers look at ways to get more units sold pronto.
Easiest route to a Golden Visa?
Property market sources say the current offplan offers represent the easiest route to buying a home in Dubai – and even get a Golden Visa. Most developers now help with the Golden Visa processing for those investors who have committed to a Dh2 million or higher value property by the time they pay 20% of the value.
In some cases, the visa processing from the developers starts even at a lower payment percentage. (Earlier, Golden Visas were issued close to the payment of the Dh2 million mark.)
“Generous offplan payment plans are the easiest route for a UAE property investment linked to Golden Visa,” said Muhammad Imran Khan, Managing Director of Investment Experts. “It is a strong magnet for investments in Dubai property, reflecting a tilt towards an end-user dominated market.”
Dynamic pricing
There are other price-based tools that developers have introduced – such as ‘dynamic pricing’.
It works like this – say a property buyer wants flexibility on his/her monthly payments. When buying a property, some developers allow investors to decide on the payment scheme that would work best for them.
“It could be that the buyer can choose from a 1% monthly instalment or higher, and then the final property value they would pay changes based on that,” said an industry source. “Dynamic pricing is still in the nascent stages in Dubai offplan market, but there are buyers and developers who can benefit from it when used wisely.”
Investors: Just keep your eyes open
Hanishka Gehani is the Director at Zabadani Properties, and she emphasizes that property buyers need to keep the full picture and all the details in mind when signing up. Even if on paper, the cost of entry towards buying a property is at its most accessible.
“As developers resort to variable and increasingly flexible payment plans, investors and end-users have to be careful about how these compare with what they would have to pay if they took a mortgage,” said Hanishka. “Don’t just go by the entry cost but focus on the overall value that they are getting for their money.”
Investors and developers need to be careful with such payment plans because any delay in payments will cascade into delays for the projects, something that already has started to be seen in some projects.
