In the UAE, particularly in Dubai, there has been a noticeable increase in real estate developers offering more accessible payment options and incentives for off-plan properties. A recent initiative by a private Dubai-based developer introduced an extended payment plan that spans eight-and-a-half years, including five years of post-handover payment options.
Dubai Real Estate: Rise in Sales Incentives
The trend of providing sales incentives is growing among Dubai developers to attract new investors and end-users. These incentives include reduced down payments, flexible payment schedules, and additional promotional offers. The off-plan property market remains robust, drawing interest from both local and international investors who are lured by promising returns on investment in a tax-efficient environment.
Extended Payment Plans and Down Payment Options
Developers are increasingly offering payment plans that extend beyond the typical 4-5 years, with some plans requiring monthly payments of less than one percent. Additionally, a developer recently introduced a plan with a 0.5 percent post-handover payment option. Lower down payments, sometimes as little as 10 percent or less, are also becoming more common, making it easier for buyers to enter the market.
Promising Returns for Investors
Developers are enticing buyers with promises of substantial returns, with many suggesting high single-digit returns, and in some cases, even double-digit returns depending on the location of the property.
The market report highlights that some banks in the UAE are now offering additional financing options for off-plan properties. Specifically, buyers can secure up to 10 percent extra financing if the project is at least 50 percent complete. This added financing helps mitigate risk for lenders and supports buyers in established developments.
Growth of the Off-Plan Property Segment
The off-plan property sector in Dubai is experiencing rapid growth. In July 2024, off-plan transactions accounted for 60 percent of total property transactions, a significant increase from 49 percent in July 2023. This surge is indicative of the growing popularity and potential of off-plan investments in the region.
Market Trends and Future Projections
The second quarter of 2024 saw strong sales activity, spurred by ongoing project launches. This activity led to a 2 percent rise in average sales prices, with certain areas like Jumeirah Village and Business Bay experiencing even higher growth. The increase in demand can be partly attributed to the introduction of higher-quality projects that are competitively priced.
Bayut reports that the off-plan market has never been more vibrant, with approximately 48,000 new units launched in the first half of 2024. The steady influx of new residents is maintaining high demand levels.
Looking ahead, the off-plan property market in Dubai is expected to continue its upward trajectory in the second half of 2024, supported by new project launches and ongoing market momentum. The positive outlook and strong investor confidence signal a thriving real estate sector, offering significant opportunities for both local and international investors.