Installment for the property buying in Dubai

11 Apr 2024

In Dubai's real estate market, the practice of selling apartments on installment plans is widespread. Almost all developers offer their clients the opportunity to purchase property under favorable conditions. Whether it's a cozy studio, a townhouse, or a luxurious villa, the entire sum can be divided into several payments. Let's delve into this further.

🔸 Payment Plan – this is the term used for the installment payment schedule. It typically consists of two figures, for example: 50/50 or 30/70. The first portion is paid while construction is underway, and the second is paid after the property is handed over.

🔸 Typically, installment plans range from 2 to 6 years, depending on their type:

Handover – before completion of construction or receiving the keys;

Post-handover – after completion of construction or receiving the keys.

🔸 Let's break it down with a specific example.

Service apartments in the new project Kempinski Residences The Creek Dubai can be purchased on a handover installment plan of 50/50 over 6 payments, tied to specific dates:

1. 10% – after booking;

2. 10% – after signing the SPA;

3. 10% – in April 2023, when the property is 15% complete;

4. 10% – in September 2023, when the property is 30% complete;

5. 10% – in February 2024, when the property is 45% complete;

6. 50% – after completion of construction in the 3rd quarter of 2025.

🔸 Unfortunately, it's not possible to buy properties on the secondary market on installment plans. Developers only offer them for properties under construction. This principle is called off-plan – purchasing property before completion of construction.

🔸 Differences from mortgages. Installment plans are provided by the developer – for each project, they formulate a payment plan where you do not overpay above the price. A mortgage, on the other hand, is a loan provided by a bank for purchasing property, with an interest rate added to the total cost.

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