Interest-free installment plan for real estate in Dubai

The real estate market in Dubai is developing at such a rapid pace that not everyone can keep up with it. In this city, developers bring to life the boldest fantasies of architects that seemed unreal just a couple of years ago. Today, the Dubai real estate market offers such opportunities that buyers couldn’t even dream of a few years ago.

Purchasing property in Dubai through installment plans has become a very popular solution for housing in the Emirates. This method of buying apartments attracts foreign investors and brings billions of dollars to the budget of the United Arab Emirates annually.

Let’s take a closer look at all the options for property installment plans in Dubai.

Payment Plans

If you are willing to wait a few years before moving into your own apartment and settling down, then this method is definitely suitable for you. Let’s explain why: payment plans are offered for properties that are still under construction (off-plan).

Flexible and convenient payment plans are the most effective way to attract investments in real estate. And developers skillfully leverage this method. They come up with new and more favorable installment conditions for buyers.

The largest construction giants in the Emirates (Emaar Properties, Dubai Properties, DAMAC, Select Group and others) offer payment schemes such as 10/90, 20/80, 30/70, 40/60, 50/50, 60/40. Some construction companies are even willing to divide the cost of the property in such a way that the buyer only has to pay 1% of the apartment’s value per month.

Construction companies are literally competing to attract more investments because they need to sell all the properties even during the construction phase. Otherwise, the developer would incur additional expenses for the unsold properties. According to the laws of the Emirates, if the age of the property exceeds 3 years, a 5% fee of the total apartment price must be paid. Neither the developers nor the buyers want additional expenses. That’s why all construction companies strive to sell all the properties during the construction phase and come up with new and advantageous ways to attract buyers.

What makes these payment plans convenient is that they are interest-free. When signing the property acquisition contract, the final price of the property is specified. It is divided into a certain period of time during which the buyer is obliged to pay the full amount.

Let’s explain with an example: a Dubai apartment (in an unfinished residential complex) costs AED 1,500,000. The developer offers to purchase this property through a 40/60 scheme, for example. This means that the buyer has to pay 40% of the apartment’s price during the construction phase and the remaining 60% after the completion of the building within 3-5 years (depending on the contract terms). You have the right to use the property: live there yourself or rent it out and gradually pay off the installment without paying interest to the bank. Is it beneficial? Definitely, yes!

Popular Types of Installment Plans

Let’s consider the types of installment plans that appear most advantageous to buyers and are in high demand among those wishing to buy a home in Dubai:

Pre-Handover Payment Plan

In this case, payments are made in two stages. The first part of the payments is made gradually as certain construction milestones specified in the contract are reached. It can range from 10% to 60% of the total apartment price. The initial payment amounts depend on the developer as they establish their own individual payment plans for the property. The second part of the payments is made monthly but after the completion of construction and handover of the property.

Post-Handover Payment Plan

This is a classic type of installment plan that most buyers prefer. In this case, the buyer pays a certain percentage of the apartment’s price (usually 10% to 20%) as an initial down payment. The remaining amount is divided into monthly or quarterly installments over a period of 3 to 5 years, depending on the contract terms.

Construction-Linked Payment Plan

In this type of plan, payments are linked to specific construction milestones. As each milestone is achieved, the buyer is required to make a predetermined payment. This allows buyers to track the progress of construction and make payments accordingly.

Percentage of Completion Payment Plan

This type of payment plan is based on the percentage of completion of the property. The buyer pays installments based on the progress of construction. For example, if the construction is 30% complete, the buyer pays 30% of the total property price.

These are just a few examples of the installment plans available in Dubai. Each developer may have their own variations and terms. It is advisable for potential buyers to carefully review the payment plans offered by different developers and choose the one that best suits their financial situation and preferences.

In conclusion, the real estate market in Dubai offers a wide range of installment plans that have made property ownership more accessible to buyers. With flexible payment options and attractive schemes, developers are able to attract investors and sell properties during the construction phase. The popularity of installment plans in Dubai is expected to continue growing as more buyers recognize the benefits of this financing option.

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