Developers go all out to woo buyers with guaranteed rental returns and generous post-handover payment plans
It’s a good time to be a property investor in Dubai. To prevent being caught out during a lean phase with high levels of unsold stock, developers are sweetening deals like never before.
While a lot of the private developers were already offering deals where they absorb the four per cent registration charges to be paid to the Dubai Land Department in addition to generous post-handover payment plans, now they are going a step further and wooing buyers with guaranteed rental schemes.
These incentives are a far cry from the freebies offered earlier in Dubai such as private jets, luxury sedans and vacations.
For instance, Fortune 5 Real Estate is offering guaranteed rental returns for limited Cassia townhouses in the Fields master community in MBR City District 11 in Dubai.
“If the project is well-designed, using quality materials with good fixtures and fittings and benefits from great facilities or is built close to good transport links (Metro, etc.) or lastly has great views over water (marina, canal or sea) or greens such as golf courses, parks etc., then these freebies are not necessarily needed. The reputation of the developer, along with a positive history of building and delivering on time is of far greater importance. Having said this, if a buyer is offered to have the transfer fee halved or waived altogether from one project over another, of course, the buyer will be swayed if all other features are the same,” says Mario Volpi, chief sales officer, Kensington Exclusive Properties.
These incentives are more in play for off-plan properties in Dubai. Developers’ efforts seem to be paying off, going by how off-plan transactions accounted for 58 per cent of all residential deals in Dubai from January to April 2017.
“Most of these gimmicks are basically discounts. They work well if used occasionally by the same developer, like any other promotion. If you over-use it, you lose the plot. Moreover, nothing beats quality, timely delivery and a great location,” says Sanjay Sachdev, MD, sales and marketing, Sobha Group.
“It is not uncommon for developers to offer sweeteners such as rebates on registration fees, extended payment plans post completion and guaranteed rental returns, especially in the current market situation. Many times we see buyers taking advantage of these deals as receiving such rebates makes them happy. However, they seldom bother to check how the discount has been structured, which is of utmost importance. We haven’t received such requests from investors who have purchased property at Imperial Avenue as they are aware that they are buying into a quality property with state-of-the-art facilities, neither have we lost any customers because we haven’t offered such freebies,” explains Rayomand Dastur, director, sales and marketing, Shapoorji Pallonji International Property Developers.
For off-plan property, investors are looking for return on investment. So, if a developer offers guaranteed returns, this is a plus. Meanwhile, for ready properties, lowering costs for end-users by extending payment plan or paying the transfer fee is also of benefit. Therefore, these incentives are the best way to get in buyers now.
“Buyers always want some ‘deal’ if they can get it. It’s human nature. We all ask for a ‘deal’ in life. That does not mean we need to give these sweetened deals all the time. Basically promotions work if you use them wisely,” adds Sobha Group’s Sachdev.
“In a robust market like the UAE, developers have to be innovative with their offerings in order to grab market share and the attention of potential buyers. Buyers these days have the option to choose from many and factors such as guaranteed rental returns and payment plans helps customers get added value in the offerings available. We entered the market in 2104, where we not only offered affordable prices but also a solid payment plan. This has helped us sell all our projects till date,” says Rizwan Sajan, founder and chairman of Danube Group.
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