By Arab News
By Rebecca Spong
UAE property developers are ramping up efforts to win over prospective buyers with discounts and attractive payment terms, hoping to counter the expected fall in sales during Ramadan.
The onslaught of deals come as the country is already grappling with declining real estate prices as well as an anticipated increase in the supply of residential units in the coming year.
“During the holy month, property transaction levels are known to dip and this when combined with a real estate market that is continuing to soften, developers will unsurprisingly, get creative to entice demand,” said Faisal Durrani, partner, head of research at property consultancy Cluttons.
“Offering to cover part, or all of the property transfer fee, or providing ‘special’ Ramadan payment plans are reflective of both a seasonal reduction in domestic buyer demand, as well as the persistence of a challenging market,” he told Arab News.
Deyaar is offering to cover 100 percent of the Dubai Land Department fee for any purchase of the last available units in its Midtown Dania district development, according to a stock exchange filing.
Emaar — the developer behind the iconic Dubai Mall — is making a similar Ramadan offer of covering the land fee on the sale of units in Downtown Dubai and the Opera District. It is also offering 50 percent off the fee on some projects in Dubai Creek Harbor, Dubai Hills Estate and Emaar South.
Abu Dhabi’s Aldar has also announced it will waive 100 percent of the property registration fee on certain developments during the holy month.
Developers are offering increasingly flexible payment terms, with Deyaar giving buyers the chance to sign up to a payment plan that comes into force three months after the purchase, with one percent monthly instalments.
The developer’s Midtown properties are priced from 680,000 dirhams ($185,125) for a one-bed apartment, with buyers due to pay 80 percent of the cost on handover. A five percent booking fee is required to secure the property. The development — which is being built in Dubai Production City — is at 35 percent completion and Deyaar is on track to hand over properties in the fourth quarter of 2019, according to to the DFM filing.
Dubai’s Emaar is also offering more payment flexibility, with four or two-year post-handover payment plans on specific projects.
Sale prices of apartments and villas in Dubai dropped by 3.8 percent last year, according to Knight Frank’s GCC property report published in April. Abu Dhabi saw a sharper drop with apartment sales prices declining by 10.2 percent and villas by 5.5 percent.
The supply in residential properties is edging up in both emirates, the report found. Dubai has an existing stock of approximately 488,000 units, with a further 37,000 units expected in 2018.
Abu Dhabi’s existing stock stands at 250,000 units, with a further 8,000 units anticipated this year.
Rental costs have also declined in the UAE, with the cost of renting villas in Dubai and and Abu Dhabi falling by 8.3 percent and 10 percent respectively last year. Apartment rents fell by 7.2 percent and 11.7 percent, according to Knight Frank data.