A new Dubai scheme to help first-time buyers get on the property ladder will support existing residents, at a time when foreign investors are descending on the surging property market.
The campaign, launched on Wednesday, is only open to Emiratis and residents who do not own any freehold residential property in the emirate.
Under the initiative, first-time buyers will have priority access to new homes from participating developers as well as existing inventory, discounts or limited-time offers on the sales price of off-plan units, flexible payment plans and “improved” mortgage options with better interest rates, faster approval times and reduced fees.
The Dubai Land Department registration fee can be paid through banks or credit cards at zero interest rates. Investors will also be entitled to automatic eligibility checks for residency programmes, the Dubai Rest app says.
The initiative will cover properties valued at up to Dh5 million ($1.36 million). There is no salary criteria for investors to participate and it is left to banks to decide on financing, depending on buyers' credit scores. People of all nationalities, aged 18 or over, with an Emirates ID can take part in the initiative.
Matthew Green, head of research at CBRE Mena, says since the initiative is only available to UAE nationals and residents, it will help to balance against the volume of foreign non-residents who have bought off-plan properties in recent years.
“This whole thing is clearly designed to pull in new investors, locals and expats alike,” says Shazia, a property owner in Dubai who didn't want to give her full name. “With low entry prices and easy payment plans, it’s a smart way for expats to get into the property market, especially those who are looking to invest long term but have been pushed back due to the ongoing price increases.
“The fact that it’s interest-free? Huge bonus, especially with Tier 1 developers. That alone will catch a lot of attention and totally supports the idea of ownership. But let’s be real – the success of this will come down to property prices. If they stay attractive, this could really take off,” she says.
Reema Ramesh, who owns property in Dubai’s Al Furjan, says the scheme will be welcomed by residents, who rarely get access to projects during developer launch events, which are dominated by property brokers and investors.
“Many [end-users] have been outpriced from the market due to the steady rise in values and this programme will incentivise those sitting on the fence to commit to property ownership,” she adds.
What is the programme's goal?
The core objective is to encourage more residents to transition from renting to owning, according to Farooq Syed, chief executive of Springfield Properties.
With rents continuing to rise, this scheme gives people the opportunity to build equity and participate in the long-term value of the Dubai property market, he says.
Are off-plan and existing properties covered?
The scheme is available for both. The programme applies to off-plan properties with participating developers, and for existing properties with partner banks, according to the DLD.
“That distinction is important – because it allows first-time buyers to explore both new launches and existing inventory based on their personal preferences and timelines,” Mr Syed says, adding the scheme will also help first-time buyers to buy a property from the secondary market.
“Buyers can access preferential interest rates and expedited approvals from participating banks when purchasing ready properties. This creates a real pathway for individuals who may have previously thought the market was out of reach, especially in the secondary space,” he says.
However, investors can benefit only with one partner developer and one participating bank, according to the DLD.
Which developers can investors buy from?
The DLD is working with 13 developers: Emaar, Nakheel, Azizi, Wasl, Dubai Properties, Damac, Danube, Binghatti, Meraas, Ellington Properties, Beyond Developments, Majid Al Futtaim and Palma Development.
It has also linked up with five banks – Emirates NBD, Emirates Islamic, Mashreq Bank, Dubai Islamic Bank, Commercial Bank of Dubai – for the initiative.
“When more people are empowered to explore home ownership, the buyer pool expands and that shift will influence developer strategies,” Mr Syed reckons.
“We expect more tailored offerings from developers aiming to capture this new audience segment. The competitive environment will likely drive attractive incentives.”
How to participate
Applicants should register on the DLD website or Dubai Rest app to start the process.
Once they have been verified and deemed eligible, they will receive a first-time homebuyer QR code from the DLD. This can be used to access programme benefits through participating developers and banks.
Once users successfully register, the selected developers will begin contacting eligible customers ahead of each project launch.
There are no additional fees to apply for or participate in the programme.
Where can first-time buyers purchase property?
There are no exclusive zones earmarked yet. However, significant traction is expected in emerging, more affordable areas such as Dubai Land Residential Complex (DLRC), Liwan, Silicon Oasis, Al Warsan and Marjan, Mr Syed says.
These communities already offer attractive entry points for first-time buyers and are likely to benefit from increased demand under this scheme, he says.
Does the scheme pose a risk to banks?
The risk to banks is relatively low since real estate lending is asset-backed, and existing regulatory frameworks will protect all parties, Mr Syed explains.
“We need to wait and see how this initiative will be integrated with banks,” according to Sunil Tekchandani, managing director and partner at YOUAE Mortgages, a mortgage consultancy.
“Generally, banks set their pricing based on their internal cost of funds, and each bank has different pricing structures. Therefore, it's essential to understand what kind of preferential pricing or offers they will provide to clients.”
Mr Green from CBRE says mortgages of sub-4 per cent are expected to be made available, if banks are trying to offer below currently available rates.
Things to know
Once users submit the first-time homebuyer form, they authorise the sharing of their credit score and consent to being contacted by developers and brokers, the Dubai Rest app says.
Also, once you purchase a property, you will lose your first-time home buyer status and cannot participate in the programme again even if you sell your property, the app adds.
With inputs from Fareed Rahman
