Buy a property and pay 60 per cent only if you can

Dubai

Buy a home in Dubai, pay 40 per cent until handover and as for the rest, you decide whether to pay the rest over the next 10 years or not. That’s the proposition City Properties is offering buyers of apartments at its project in Dubai South.

“As developer, we will take on the responsibility for the remaining 60 per cent over 120 months after handover,” said a senior official with City. “We will rent out the units and then recover the monthly instalments through these. Even if the rents do not cover the instalments due, the developer will cover the payments. We are essentially targeting investors to come into our projects.”

The “Cityflex” payment plan will be available for all 10 mid-rise buildings it will build at Dubai South. The first of these should be ready by the first quarter of 2019. Prices have been set at around Dh1,000 a square foot.

Developers in Dubai have been pushing the envelope in coming up with payment plans that do not put much of a burden on buyers upfront. In recent months, they have set the bulk of the payments to be made after handover.

Where earlier two years was the average post-handover payment period, some developers are extending it to five and beyond. A handful have now set the marker at 10 years after handover. Now, for a developer to take on responsibility to meet the instalments is virgin territory.

“There could be many reasons for some buyers not being in a position to meet commitments,” the official added. “But as long as the property is there as backup, we are confident the commitments can be met by us.”

The Cityflex plan also offers buyers an interest-free payment option over 10 years.

And even if a buyer wants to make an exit, City is willing to meet their wishes. “Say after 5 years, the buyer wants his unit back, we will just need that notice period (as per Rera requirements) and it will be passed back,” said the official. “The buyer will then need to clear the remaining 30 per cent payment over 5 years on his own.”

City forecasts investments of Dh700 million to build up its Dubai South portfolio. It is the first time the company is venturing into freehold; until now its real estate interests had been principally into rentals.

Dubai South itself is in line to be one of the more sought after locations for affordable residential rentals. Hundreds of units from private developers are being readied for handover in the coming months.