Payment Plan Explained

Off-plan properties are those sold before construction begins and are gaining popularity in Dubai due to their potential for capital appreciation, lower costs, and strong rental yields. One key factor driving this demand is the variety of flexible payment plans that make purchasing easier for buyers.

Traditional Off-plan Payment Plans:

Local banks offer loans for the final 30-50% of the property’s value, even to non-residents, as buyers often have 50-70% equity at completion.

1. Down Payment: Typically 10-20% of the property’s value, depending on the developer.

2. Common Payment Plans:

   • 80/20 Plan: 80% paid during construction, 20% at handover. Payment methods include:
     • Construction-Linked: Payments tied to project milestones.
     • Time-Linked: Fixed monthly or quarterly payments, regardless of construction progress.
   • 60/40 Plan: 60% during construction, 40% at handover.
   • 50/50 Plan: Equal payments during construction and at handover.
   • Deferred Payment: Pay part of the price later, after completion.

Post-Handover Plans:

These plans allow buyers to make payments after the property is handed over, often with 30% paid during construction, 40% at handover, and the remaining 30% in monthly instalments over two or three years.

Advantages:

• Lower prices during development.
• Flexible, installment-based payments.
• Choice of floor plans at early stages.
• Developer incentives like fee waivers.

FAQs:

• Can payment plans change?: Changes are rare, but small adjustments may occur depending on the developer.
• How long do plans last?: Typically 2-5 years, but may be delayed. However, if you buy off-plan for which construction has started and progress made the plan can be shorter.
• What if I can’t make payments?: Discuss options with the developer for flexibility.
• Why do plans differ?: Developers tailor plans based on market demand and project status.

Conclusion:

Off-plan payment plans, especially post-handover options, offer flexibility, but in Dubai’s busy market, they are becoming harder to find. Traditional plans remain popular due to rising property prices and high demand.