About 36,000 housing units are expected to be delivered this year in Dubai, which will be the largest annual new real estate units influx of the last decade, according to JLL. But Dubai's real estate investments, however, continue to grow further.
The latest Chestertons Mena’s analytic report on the Dubai market revealed that transactions volume, as well as the total amount of transacted ready homes, increased in the second quarter of 2019 by 45 per cent from 5158 units to 7,465 units and from 3280 to 4764 units, respectively. “One possible explanation for this significant upsurge is the number of attractive incentives that developers offer their buyers to attract them,” the report said.
These incentives and bonuses range from the Dubai Land Department zero registration fees (4 per cent of the housing cost in the usual case) and the absence of maintenance fees up to the guaranteed rental income of 24 per cent, which are becoming more common as developers strive to get rid of their unsold real estate stock.
Sales schemes for a period of three to 20 years are the most successful among the developers’ strategies.
Given the current in the UAE, it is difficult for many buyers to get bank financing for an initial deposit when buying a home. Thus, developers take on the role of banks in stimulating demand and increasing the absorption rate of new properties by the market.
Among the various incentives, post-handover payout plans are valued by buyers more than free assets such as a gift car. The ability to pay for real estate after it has already become an investment that generates income to pay for utilities and other fees, at least, turned out to be a key of increasing buyers’ interest in Dubai real estate purchasing.
Today, some of the most generous schemes give buyers more than 20 years to pay for purchased housing in three areas: Meydan, and .
But experts also believe that long-term post-completion payment plans will have to be eliminated at some point — either because the developers will no longer need such additional incentives when the market situation improves, or because they won’t be able to afford such schemes any longer when the market dips even further. In addition, not every post-handover payment plan is as good as it seems at first glance. In many of them, prices are inflated, because developers are adding too high interest rates to their selling prices.
In general, over the past year, several new incentives from developers have appeared at the Dubai’s real estate market, which include, in particular, three-year renewable business licenses, three-year renewable family visas and 100 per cent business ownership, which are offered, for example, with paying 20 per cent of the apartment’s cost in one of the Emaar’s communities. Among the incentives, you could even find very unexpected ones, such as, for example, free school tuition fee for a year offered by the developer to attract buyers to his off-plan project on , where he also promised a guaranteed 10 percent return on investment over five years.
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