BUYERS GET TO PAY ONLY DH3,000 OR SO A MONTH ON 10% DOWN PAYMENT
Associate Editor
Worried about meeting those down payments and subsequent instalments on the property? If yes, why not opt for more manageable monthly payments of Dh2,000 or Dh3,000?
More developers in Dubai are offering such schemes on offplan purchases, with the instalments set on terms easy on buyers’ pockets. For instance, someone buying a Dh475,000 studio at MAG City in Meydan needs to put up 10 per cent on booking and then pay off another 40 per cent through instalments set as low as 0.7 per cent of the property value. What this means is that the monthly outgo will be Dh3,000 and then some.
They can continue with this until August 2021, and then the balance 50 per cent should be paid in one go in November of that year, according to a MAG spokesperson. Another developer, Nshama, has pegged a limited-period offer at Dh3,588 a month for a Dh428,888 apartment in Town Square.
Market sources say there have been recent instances where the developer is not even asking for a down payment, instead signing up the buyer to immediately start the monthly payments.
And it is not just private developers who are going all out with monthly schemes. Emaar introduced one at its project in Dubai South, at 1.25 per cent of the property value.
“We expect such schemes to proliferate to some of their other communities as well,” said Sameer Lakhani, Managing
■ Director at Global Capital Partners. “Monthly payments make transactions more affordable for the buyer, without affecting their cash flow or the need for them to cough up lump sum payments.”
Start of the trend
It was Danube Properties that kicked off the monthly payment trend some three years ago, right from the first launch. Payments were set at 1 per cent of the value, and something the developer continued in subsequent launches. But it has taken time for other developers to get into the act — a situation they are trying to rectify now.
It may also be that developers realise they need to come up with incentives other than super-stretched post-handover payments. So much so, it seemed every other developer in the last 24 months had some variation or the other of a posthandover plan, with some going all the way up to 10 years and more.
But now, Dubai’s masterdevelopers are reining in post-handover periods to an average of three years. “It’s quite a contrast to what was seen last year,” said Lakhani.
“For the most part, these post-handover schemes are not being designed to increase prices. There are a number of “special offers” developers have also resorted to, which include the possibility of price reductions as well as customised payment plans.”
Will private developers in Dubai follow the lead of the big guns and gradually bring down post-handover plans to three to five years?
The impression has been building up that anything over and beyond five years was excessive and end up hurting the property market longterm. Clearly, post-handover schemes from developers are losing their flavour of the season status.
Instead, developers are again bringing back banks to offer mortgages on their projects, “in a way that buyers do not have to make lump sum payments,” Lakhani added.
“Instead, they can graduate from aligning with the developer to dealing with banks while keeping their monthly instalments virtually unchanged.”