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Premium Off-Plan Releases in Dubai’s Newest Island Development Require a 20% Upfront Investment from Buyers.
Investors in Dubai’s Palm Jebel Ali are making substantial down payments of either $1 million or $2.7 million, equating to 20% of their property’s value. This significant upfront commitment is setting new records for off-plan projects, given the scale and number of property releases on the island.
The typical down payment for off-plan properties in Dubai currently ranges from 5% to 10%. By requesting a 20% down payment, Palm Jebel Ali aims to ensure that only committed and serious buyers participate in the bookings. Demonstrating immediate funding capacity is a vital part of this process.
The project, relaunched earlier this year, has garnered instant success, and the decision to set the down payment at 20% for these premium beachfront homes reflects the developer’s confidence. The first release has proven highly successful, further fueling demand for subsequent releases.
The units released so far come with price tags ranging from Dh18 million to Dh50 million-plus, and initial market feedback suggests that the first homes will be delivered around 2027.
Interestingly, buyers are required to complete full payments on these homes by the time of handover, with no post-handover payment options available. The payment structure currently consists of a 20% down payment, 60% during the construction phase, and the remaining 20% upon handover.
Alternate Down Payment Scenarios
In Dubai’s real estate market, the typical down payment for property purchases typically hovers in the 5-10 percent range. It is only in the realm of super-premium and niche off-plan launches that developers occasionally ask for down payments nearing 20 percent. However, even in these cases, it typically applies to a limited number of properties within that specific project. This practice is nowhere near as widespread as what we are seeing with the Palm Jebel Ali project.
To grasp the sheer scale of this undertaking, consider that Palm Jebel Ali is twice the size of the iconic Palm Jumeirah. With such grand ambitions come complex challenges in terms of construction and development.
For luxury ready-to-move homes, a 20 percent down payment is more common. A brief overview of off-plan sales indicates that this 20 percent requirement is more prevalent for penthouses valued in the hundreds of millions of dirhams. On the Palm Jumeirah, there are instances of similar requirements for select towers. However, it is essential to note that these instances are exceptions rather than rules in Dubai’s property market.
