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05 December 2023

Buy Dubai property? Capital guarantee, money back schemes

By Parag Deulgaonkar

After some developers in Dubai waived off 4 per cent registration fee and offered monthly payment schemes to entice buyers, new schemes such as “capital guarantee” and “money back” have been rolled out.

Dubai-bourse listed Damac Properties has announced guaranteed annual return on advance payments during construction of three per cent per year, which it claims “is equivalent to twice the interest on fixed deposits.”

The developer says customers will receive the payments twice a year until completion of the unit.

Another option is the “capital guarantee" which ensures the property’s value for two years after delivery. In short, it means the developer will pay the difference to the investor if the unit price has any decline between the time of delivery and the end of 2019.

“We have always maintained that Dubai shows confidence and growth in the medium and long term”, said company Senior Vice-President Niall McLoughlin.

“The company’s recently launched products provide the opportunity for those looking for safe investment and high return”.

In February 2016, Emirates 24/7 reported that Emaar Properties, the largest developer in Dubai, was waiving off the four per cent registration fee on Casa villas in Arabian Ranches. Customers were being given 12 months to make the full payment with property agents no transfer charges (4 per cent); and the Oqood land registration charge (4 per cent), according to a real estate agent.

KPMG, a consulting and audit firm, has said that property prices in Dubai will be under pressure this year due to lower oil prices and strong US dollar, but the market will start to recover in 2017 as infrastructure work surrounding the Dubai Expo 2020 gets under way.

In January 2016, JLL, a real estate consultancy, said the UAE remains an attractive real estate market and some buyers, especially owner-occupiers and those investors taking a long-term perspective may well see value at current levels.

“Overall, we remain confident that while prices and rentals will soften further in the short term, they are likely to increase again, perhaps as soon as 2017, as the UAE continues on its’ path to becoming a more mature real estate market,” it said.

Moody's Investor Service did point out in 2015 that the infrastructure spend by the government in the run-up to Expo 2020 will help sustain the property market. Besides, Hussain Nasser Lootah, Director-General of Dubai Municipality, has said population is expected to increase to five million by 2030, which will fuel demand for houses.

Tags: #UAE #Dubai #Rent #Tenants #Property #RealEstate #Invest