Dubai’s new realty mantra is working
LONGER PAYMENT PLANS WIN OVER END USERS, INVESTORS
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Property sellers in Dubai are reworking that old theme of “Buy now, pay later”. Instead, their version is “Buy now, move in, pay later…”.
And they are finding takers for it — maybe not in the numbers seen during the boom years, but still in good enough numbers. In the past 12 months, more of Dubai’s developers — and even individual sellers in the secondary market — are able to attract buyers by offering them the right sort of post-handover payment plans. Whether for off-plan and, increasingly, for ready homes, post-handover schemes of three to 10 years are helping them seal the deal.
The process is quite straightforward — offer buyers a low down payment option, and then stagger most of the payments after they get the keys to their property. The longer the payment period, the better it is for the property buyer to keep his commitments. One leading developer, MAG, even has a zero down payment scheme at its MAG City project in Meydan.
In most cases, since buyers are dealing directly with the developer, there is not even the hassle of trying to find a bank to help with the mortgage.
Here’s what Zamina Hussain, who recently moved into a twobedroom apartment at Azure on the Palm, had to say: “Today’s payment plans are effectively the same as loan instalments … but without the approval process that can be somewhat time consuming. It has made things a lot easier for end users.”
At a time when property values are under pressure and banks remain extremely choosy about whom to lend to, these payment plans are able to convince more buyers to do so now than wait.
As Uzair Razi, who bought a home at Jumeirah Park, says: “There is never really a “right time” to buy a property … so by definition, that decision is dictated by considerations other than purely the price. For me and the family, it was about getting a villa in a community that would be our home for the next 10 years.”
Uzair answers the description of the sort of buyer developers and property sellers want to see more of in Dubai
It is a great opportunity, more so for a fresh graduate who has only just started working.”
— someone who is thinking in terms of holding on — and living in — the property for a decade or more. Because Dubai’s property market cannot rely exclusively on investors coming in and creating a “buy and sell” momentum.
Because there is enough talk happening in the marketplace about Dubai’s oversupply situation and what it could mean for the property market going forward, Mark Mobius, the investment guru, was the latest to issue such a stark warning.
Options
So, the question for property buyers essentially boils down to whether to heed these warnings or to go ahead with the purchase. Asma Ali chose the second option, picking up a property at “The Nook” cluster in wasl Gate, a sprawling mixed-use community in Jebel Ali, which will be completed late 2021. “Having invested 25 per cent of my savings, I look forward to owning an asset and capitalising on it post-handover by leasing it … or selling it,” said Asma, adding that the flexible payment scheme helped her decide. A one-bedroom there lists at Dh477,777, and 60 per cent of the payment is set on handover.
Much the same mindset was the prompt for Walid Al Rajaby to pick one in the same cluster. “It is a great opportunity, more so for a fresh graduate who has only just started working and seeking the best possible deals to take advantage of,” he added.
On its part, the developer, the Dubai Government-owned wasl, was direct with its messaging. This was built around targeting young Emiratis to get on the property invest ladder.
Zainab Mohammad, Chief Property Management and Marketing Officer at wasl properties, said: “Our promotional offers are a public awareness strategy to encourage target groups to invest.”
So, for the moment and going forward, the focus will continue to be on the post-handover plans. If this way, Dubai’s property market sees enough end users and longer term investors come in, all the better.
For Sana Hassanali, that’s what counts. Having picked up a two-bedroom unit at the Golden Mile on the Palm from Nakheel, she said: “Undoubtedly, the fact that we could get hassle-free payment plans played a large part.” (She gets to pay back over five years.)
But for many, the payment plan itself is the deal clincher.
Our promotional offers are a public awareness strategy to encourage target groups to invest.”