Higher interest rates and falling property prices could hit Dubai developers’ transaction volumes linked to the purchase of properties off-plan, warn experts.
Craig Plumb, head of research at property advisory firm JLL in Dubai, said rising interest rates were undoubtedly a negative for residential real estate markets and Dubai was no exception.
But he said the Dubai market was less susceptible due to the higher number of purchases made with cash or using interest-free finance plans offered by developers.
Jesse Downs, managing director of Phidar Advisory, a real estate consultancy in the UAE, said developers have been offering generous off-plan purchase deals. These often involved offers to pay between 40 percent and 60 percent of the sale price two years or more after completion, she said.
In the past, developers offered a standard payment plan which was 70/30 — meaning 70 percent money paid during construction in staggered payments, and 30 percent paid on handover. Today, there are offers of 20 percent on booking and 80 percent on handover.—APP