In Dubai property, pocket-friendly offers show up more on ready homes – including 1% down payment

Dubai: Want to buy a home in Dubai but find that investing in one of the new off-plan launches is way too costly?

Then, you should be looking at a ready home from the secondary market, which these days typically come at a fair discount to a comparable off-plan unit. (The current difference between off-plan and ready prices are anywhere from 20-50 per cent in favour of the former.)

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Another option would be to see which developer has a soon to be completed project. Chances are that the developer will have heavy sales promotions going for any unsold units before the handovers start. “They are already getting hyper-aggressive and reduced the down payments,” said a property consultant.

Such deals could see a 5 per cent down payment against the market average of 10 per cent and more, and relatively less heavy monthly instalments until such time a bank steps in to extend mortgages.

Down payments have been further slashed to a flat 1 per cent on some of these, sources add. (Add to it the now frequent 1 per cent monthly instalments, and it all adds up to a more affordable buying option.)

“The rule of thumb is if a soon to be ready building is only 50-60 per cent sold, then the developer will add more sweeteners to the offers,” said the consultant.

Evict – and sell off

A third option is to be alert to any potential sale happening. Many investors and building owners have been issuing eviction notices, and in some cases across an entire building to further its chances of a sale. (Even after the selling price on these units are jacked up, there could still be a price difference with a brand new offplan.)

MORE EVICTIONS?

More tenants are getting eviction notices, or being told their lease renewals will not happen as the ‘landlord wants to move on’. Selling an apartment or building with existing leases does act as a drag on what the owner can ask for and get.

Residential buildings with ‘no-lease’ or soon to be over leases are rated as best buying option these days.

Get the timing right

Even as Dubai property market gets into a fourth straight year of growth, there are deals starting to show up city-wide that are more evenly balanced between buyer and seller aspirations. It’s there on ready under Dh2 million properties as well as on luxury homes with fancy price tags.

“Larger and more expensive apartments have also seen more price decreases, aligning with the city-wide trend of a decline,” says a new report from Reidin-GCP. “The most dramatic price drop observed was in 7-bedroom villas between July to end December 2023,” the Reidin-GCP. “Villas with

5-bedrooms or more only account for 20.29 per cent of ready villa sales between July and December (before even mentioning offplan sales, which account for the lion’s share of the market).”

What’s showing up on 5- or 7-bedroom ready villas is filtering through into other price categories too. The general impression is that the best deals/discounts are there in ready homes – if the prospective buyer can find one.

Will banks give more help on ready home mortgages?

A lot of potential end-user buyers in Dubai are also waiting for interest rate cuts and by extension, on what they will have to pay on a new mortgage. As against the earlier expectation from March onwards, banking industry sources suggest mid-year could be the start of the rate drops. Even then, much rests on what the US Federal Reserve thinks about US inflation rates for an eventual cut.

“We are hoping that UAE banks will ease up on lending to ready home buyers at the earliest,” said a developer source. “Many end-user investors are fearing they will get priced out if they wait too long. By then, even ready home prices could see an increase, and that will put off many potential deals.”

Current rules require that up to 30 per cent will have to be put in by the property buyer for mortgage funding release. When property value gains have already climbed by well over double-digits, any new buyer on a tight budget will find putting up his/her side of the payment and then paying off the mortgages can easily turn onerous.

This is why a 1 per cent down and easier instalment options from sellers (including developers) can be such a help for buyers these days. And at the same time, rev up the ready property sales too…