Considering buying a house in Dubai? Then, in an effort to offset buyer anxieties about rising home prices and mortgage rates, and if the global economy is about to enter a recession, developers and private sellers are offering some of their biggest incentives.
More developers with off-plan projects in the city’s rapidly developing freehold zones are already responding to the sweetened offers with savings of rather substantial proportions. The extent of the temporary “discounts” for some fresh launches is greater than 20% of the listed prices.
“There are two sales patterns we can see: for luxury property in Dubai, there are hardly any major incentives on offer from developers,” said an estate agent. “There’s still sufficient demand from global investors wanting high-end homes here, and ready to close the deal on cash.
“The second pattern is in the mid-market/affordable property space, where developers are bringing back discounts, 1 percent month payment schemes, and extended payment plans of up to 8-10 years.”
And where may property owners find bargains? Depending on the developer, but if you pay close attention to fresh off-plan launches outside of the main development zones, you might be able to negotiate favorable selling prices.
Mortgage-related concerns
Mortgage costs will continue to rise through 2022, with the 0.5% interest rate hike on December 14 serving as the cap. This is mostly due to the expansion of direct purchasing options from developers. End-user property buyers are especially concerned about the upcoming rate rise in February as well as the subsequent hikes.
According to real estate sources, Dubai’s foreign investor activity will remain strong throughout the year. However, developers are aware that they must do more to convince customers.
Payment plans would be an alternative to discounts. For mid-market properties with monthly payment plans of Dh3,000 or less, there are sales deals running. occasionally over a ten-year payment period. “Payment commitments at these levels are finding favor with end-user buyers,” said a broker. “They don’t have to worry about mortgage rate hikes or any of that
“If a developer has got a ready property and backing it with similar payment plans, then he is even better placed. And so are buyers.”
Service charges too
Are you concerned about service fees? Developers have taken care of such at several projects as well. An upscale townhouse development in Meydan is being advertised with the guarantee that owners will pay no servicing fees.
Where should buyers look?
Any area where there will be a significant delivery of finished homes this year should experience more aggressive marketing. Keep an eye out for rent-to-own deals and ask developers whether they will avoid paying Dubai Land Department fees. or at the very least cover half of it. While you’re there, acquire a thorough understanding of the service rates and any potential increases from the time of handover.