- To boost property sales, a new rent-to-own scheme offered by Dubai South for new tenants at Pulse development.
- Various other property developers have followed suit and are offering incentives for buyers and investors.
Property developers in Dubai and Abu Dhabi are going the extra mile in an attempt to increase property sales by offering investors and tenants innovative incentives and payment plans. This initiative aims to drive sales as the real-estate industry reels from the economic slowdown caused by the COVID-19.
Dubai South recently announced a rent-to-own scheme for new tenants at the Pulse development, located close to the Expo 2020 site in order to boost property sales. On the other hand, Aldar has come up with an array of incentives on Abu Dhabi properties. Bloom has also unveiled new payment schemes coupled with fee waivers at its properties located in these two emirates.
According to Chris Hobden, head of strategic consultancy and associate director at Chestertons Mena, sale of these off-plan properties in Dubai and Abu Dhabi emerged after a slow second-quarter. Developers aim to lure in buyers via creative promotional offers and incentives. The new incentives are dedicated to lessening the upfront purchase costs, similar to Dubai South’s new rent-to-own scheme. Moreover, they also slot in a wide range of promotions like cash rebates, extended past-handover payment plans and service fee waivers.
The past 12 months witnessed a reduction in house prices across both emirates. Chestertons Mena reports a reduction in the value of an average apartment by 9.5% year-on-year and 7.2% on villas. Furthermore, average prices have gone down 5.3% lower on apartments and 4.8% on villas.
it is also witnessed, to increase property sales, the biggest developer in Abu Dhabi, Aldar, is giving a variety of incentives on its properties. These include a 4% rebate on the purchase of new homes, service charges and maintenance fees waivers for three years. Moreover, the company is also collaborating with banks to provide home finance at low-interest rates in some of its developments.
Executive director at Aldar Properties, Rashed Al Omaira, reports that owing to the drastic changes in the market, it was inevitable for leading players to quickly conform to the rapidly-changing situations while coming up with sensible and flexible solutions for both homebuyers and tenants.
The developer has taken well-timed decisions for coming up with convenient and innovative solutions for the customers. These include multiple rent-to-own schemes, paying rent via credit or monthly payment plans, and providing subsidized financing solutions in the most popular Abu Dhabi areas.
A 10-year rent-to-own scheme for buyers was made public by Dubai South for any communities situated at master-planned development near the Expo site. The customers can make quarterly rent payments while living in homes or apartments for rent. The amount shall contribute to full-ownership after a tenure of ten years. Furthermore, a rent-free period of two months is also being offered as part of this scheme at the beginning of the contract.
As per Muhammad Al Awadhi of Dubai South Properties, the company is acutely aware of the challenges and has come up with schemes that allow tenants to own properties without investing any major upfront payments.
Bloom Properties has also jumped the bandwagon, offering deals on Abu Dhabi’s Park View and Soho Square and Dubai’s Bloom Heights and Bloom Towers. These offers include waiving off service charges up to 50% on the Dubai Land Department fees and payment terms.
As per JLL, even though there is an improvement in buying activity, a lot of stock has to be disposed of. During the second half of the year, approximately 38,000 units are all set for handover in Dubai. Chestertons reports delivery of 52,000 units in Abu Dhabi. Completion delays are expected due to social distancing measures but
Dubai real estate is expected to pick up shortly.
However, developers like Arada (Sharjah) are selling units without any additional offer or incentive to the customers.
The chief executive of Arada, Ahmed Al Khoshaibi is of the view that although sales took a major hit during the lockdown period, June and July witnessed a surge making them one of the most successful periods in the history of the company.