Some Dubai developers start giving discounts on offplan prices to counter higher mortgage rates

Some Dubai developers start giving discounts on offplan prices to counter higher mortgage rates

Dubai: With more mortgage rate hikes a reality, developers in Dubai are offering straight discounts or offering property buyers the option to extend their payment period after the unit is handed over. Because trends suggest that end-user buying could drop significantly in the weeks ahead as potential owners fret over higher mortgage costs. Some developers are starting to offer 15-20 per cent discount on the property value for signing up to an offplan purchase. But down payments too will need to be higher, at typically 30 per cent upfront. “Dubai property market needs both its cash buyers as well end-users, who typically need a mortgage to finance those deals,” said a developer. “Banks are constrained in offering incentives, but as developers there is greater flexibility that can be offered on payment terms.” Already, during May, there was a 12.6 per cent drop in the number of mortgage-backed transactions – at 1,706 units sold – compared with a year ago. It was in May that the US Fed went in for a second interest rate hike – by 0.50 per cent – and which was immediately reflected in new mortgage rates in the UAE. Last week, another 0.75 per cent was