Developers in Dubai are going the extra mile to dispose of unsold stock.
Lucrative incentives, innovative payment plans and freebees are tempting investors and tenants to own a home in Dubai as developers are going the extra mile to dispose of unsold stock ahead of potential upcoming supply of over 50,000 homes this year.
Developers in Dubai are pulling out all the stops to win over buyers for newly launched and existing projects by extending post-handover payment plans on off-plan properties to ready homes as well as arranging bank financing for initial down payment of the property.
Extended post-handover payment plans from three years to anything up to 15 to 20 years, rent-to-own schemes and guaranteed rental returns are now the industry norm as the developers get creative to compete with other investment markets.
Experts?and analysts said it is a win-win situation for both developers and buyers as Dubai real estate market enters into a maturity phase and shows stability despite more than 27 per cent decline in prices since the peak of mid-2014.
Lynnette Abad, director of Research and Data at Property Finder, said developers have become quite creative over the last few years to sell their properties, both under construction and ready stock. The most popular have been the post-handover payment plans, rent-to-own and new schemes such as the one offered by Emaar and DMCC, she said.
“Developers are very aware that they need to be creative with new offerings to attract more foreign direct investment and be competitive with other popular investment markets,” she said.
Market insiders said developers have been playing the role of banks to stimulate demand for both off-plan and ready properties with ingenious payment plans. This is because under the current loan-to-value requirements in the UAE, the majority of buyers find it difficult to raise bank finance, and establish a foot on the ladder, due to hefty deposits and fees required.?
“As the real estate sector matures, developers need to come up with innovative schemes to attract buyers. Rent-to-own and extended payment plans are crucial in attracting home buyers,” said Rizwan Sajan, founder chairman of Danube Group.
He said more than 80 per cent of the UAE expatriates still live in rented homes and most of them have a wish to own their home in Dubai and these payment plan will surely help them.
“In the coming years, we expect more innovation to drive the growth of the real estate sector in Dubai,” he said.
“In 2014-15, we launched trend-setting one per cent monthly payment plan that helped us to attract thousands of end-users who had earlier been priced out of the market. Since then, we sold more than 5,000 units in the last 5 years.
“We have successfully converted thousands of tenants to home-owners. Going forward, these innovative schemes will help attract more end-users and home buyers to Dubai’s real estate,” he said.