Dubai has one of the most profitable real estate markets in the world that attracts numerous buyers and investors both from within the UAE and from abroad. Dubai Land Department reported more than 27.000 property transactions during H1 2018 worth about $30.2 bn. While UAE nationals made almost 3.000 investments worth $1.85 bn., foreigners from outside GCC countries recorded almost 12.000 transactions worth $5.7 bn.
It is not just high returns and prime location that attract investors. Besides that, property developers in Dubai offer convenient payment schemes which have become the emirate’s feature.
Pay 50% and move in
Today many property companies in Dubai offer clients the option of payment by installments. The initial installment and schedule may differ, but in some cases the deadline may reach up to five years!
The main reason for such generosity is the high level of competition on the market. Smaller companies have to compete with governmental developers, and offering better terms serves as an excellent marketing tool. Many real estate buyers and even professional investors either avoid taking out mortgages or simply do not meet the bank’s requirements. Such clients see payment by installments as a convenient alternative and consider developers as banks offering more attractive loans.
The future of installment plans
However, the recent changes on the market (both economic and regulatory) are making it harder for Dubai developers to keep offering such payment schemes. The analysts of Global Capital Partners believe that this practice has reached its limit. Previously a lot of investors would buy off-plan property on installment plan since it costs less. However, nowadays the prices on off-plan and ready real estate are not so different.
It doesn’t mean property developers in Dubai will give up on such schemes, but offered payment periods are likely to shorten.
Types of property companies in Dubai offer
Another feature of Dubai’s real estate sector is that beside standard residential, office and retail property, developers offer somewhat exotic projects.
Being a popular resort (not only regionally, but globally too), Dubai offers visitors numerous accommodation options, while the city’s developers sell units to individual buyers.
As a result, many investors purchase hotel rooms. The benefits of such investments include not only high yields, but also personal use of such units for an average of two weeks a year. In other words, it’s both commercial and resort property.
Another similar investment option is buying a hotel apartment which is a self-catering property with a kitchen, washing machine and everything you need for self-sufficient living. At the same time, such hotels also offer standard services such as cleaning, valet parking, etc. This type of hotel accommodation is usually cheaper, which is why it attracts those who want to stay in the city for a longer period of time – mostly business travelers. Families prefer hotel apartments too since you can save quite a lot of money by cooking and washing on your own instead of dining out or using dry-cleaning services.
Certain property developers in Dubai specialize specifically in hotel real estate.