By Akanimo Sampson
Real estate developers in Dubai are reportedly getting quite active with Ramadan promotions, offering straight out discounts of up to 20 per cent.
On top of the decline property values have seen in the last two years, that 10-20 per cent the discount comes to quite a decent saving for a buyer.
Azizi was the first to come out with a broad set of offers with a Ramadan tie-in, and running it for a full month until May 12.
Starting prices at its Al Furjan, Dubai Healthcare City and MBR City projects have been brought down – and the developer is also offering a guaranteed 10 per cent annual return for three years. Prices start at Dh373,000 and Dh573,000 depending on the location.
According to Tizian Raab, spokesperson at Azizi, “the 10 per cent RoI is what’s attracting investors the most.
“The flash sale discounts are up to 18 per cent, but we’re not doing fixed service charges or waiving registration fees at the moment.
“Average sales per day have been almost three-fold since April 12 – so far it’s been a success.”
The emphasis on guaranteed returns – and 10 per cent at that – is what’s most interesting. While the current trends in the Dubai property market are in favour of ready properties, developers have quite a sizeable pipeline of projects that will take another two to three years for completion.
Guaranteed returns are a way to try and more investors back into the property market while end-users chase ready or soon-to-be-ready homes.
Investor interest in off-plan sales had dropped over the last 12-24 months on concerns about oversupply and the added pressure this will have on Dubai rents.
With the promotions and discounts, developers are trying to convince investors all over again.
A top official at one of Dubai’s biggest builders said “as developers, we need to clear off-plan inventory at the first available opportunity.
“Only a handful of developers can afford to hold back sales until completion time, that too for one-of-a-kind projects.”
No major defaults
Industry sources say that post-pandemic payment defaults in Dubai’s property market have been marginal. These are for units sold and financed directly by the developer and does not have a mortgage component.
“Where possible, developers have worked closely with buyers to ease their payment schedules”, an industry source said. “Plus, most of the payments will only start coming in after the handover.”
A handful of developers have also – on a case-to-case basis -deferred payments due over the coming days as a goodwill gesture during Ramadan.
Among lenders, Abu Dhabi Islamic Bank was the major player to announce that it will defer payments on loans taken out by individuals.
Making it difficult
With developers pushing discounts and guaranteed returns, it will pose quite a challenge for individual sellers trying to sell their homes in the secondary market. On the apartment side, prices continue to decline, though the pace has dropped in select locations.
“Regarding the secondary market, average apartments sales prices have seen a 1 per cent decline in the first quarter compared to fourth quarter 2020 prices”, says Prathyusha Gurrapu, Head of Research and Advisory at Core, the consultancy. “But villa prices have actually seen a 3 per cent uptick quarter-on-quarter.”
So, are you going out to pick a new home this Ramadan? They need to keep in mind that it will still take time for an across-the-board improvement in Dubai property values. Keep checking the prices and the discounts.
