Dubai’s off-plan property market is growing as developers offer flexible payment plans, promotional gifts, and lower down payments to attract investors. Some banks in the UAE provide enhanced financing options for off-plan properties, broadening accessibility for buyers.
The Off-Plan Property Market
Competition is fueled by the entry of new foreign developers aiming to capitalize on the high demand and potential returns. Developers now offer extended payment plans, some lasting up to eight-and-a-half years, including five years of post-handover options. Monthly installment plans of less than one percent are also becoming popular, especially for mid-budget properties. Some developers have introduced down payment options as low as 10 percent or less.
To support the growing off-plan market, some UAE banks offer enhanced financing options, including up to 10 percent additional financing for off-plan properties that have reached at least 50 percent of construction. This extra funding supplements the standard mortgage amount due upon project completion, providing additional financial flexibility for buyers. However, this financing is typically available only for projects from well-established developers, ensuring a degree of risk mitigation for lenders.
Up to 60% Financing for Off-Plan Properties
Previously, banks offered 50% financing, requiring buyers to contribute the remaining half. Now some UAE banks offer up to 60% financing, making it easier for buyers to invest into the UAE Off-Plan Market.
New payment plans have allowed developers to collect up to half of the payments within 14 months of the project’s launch, ensuring sufficient funds for timely project completion.
As of July 2024, the off-plan property sector constitutes 60 percent of total transactions, up from 49 percent in the same period in 2023. Rapid project launches, rising sales prices, and increased demand drive growth. The second quarter of 2024 alone saw a 2 percent growth in average sales prices, with areas like Jumeirah Village and Business Bay experiencing even higher price increases.
According to real estate platform Bayut, the off-plan market has been thriving, with approximately 48,000 new units launched in the first half of 2024. This growth is fueled by the influx of new residents and ongoing infrastructure development, solidifying Dubai’s status as a global investment hub.
The TME Takeaway
Dubai’s off-plan property market is experiencing robust growth, supported by competitive developer strategies and enhanced financing options from banks. With flexible payment plans, attractive returns, and increased accessibility, the market continues to be a lucrative opportunity for local and international investors.
