Investors looking to invest 1.2 million AED or more in Dubai real estate often tend to pay the full amount upfront to secure the maximum discount from the developer. However, it can be strategic to consider alternative approaches that can yield more from the same budget.
A common example is the 60-40 payment plan. Under this plan, 60% of the price is paid during construction and 40% upon handover. By paying more than the typical 20% initial deposit, a discount can still be negotiated, often around 9%. This can reduce the price of an apartment from an original 1,200,000 AED to 1,092,000 AED.
With this strategy, it is possible to purchase two identical apartments with the same budget instead of one. For each apartment, an initial payment of 655,000 AED is made, with the remaining balance arranged later through bank finance. This spreads the same capital across two assets, which can offer more opportunities for return.
Calculation Overview
Scenario 1: One apartment with a 15% discount for full payment
Original price: 1,200,000 AED
15% discount: -180,000 AED
New price: 1,020,000 AED
Amount paid: 1,020,000 AED
Number of units: 1
Scenario 2: Two apartments with a 9% discount and a 60-40 payment plan
Original price per unit: 1,200,000 AED
9% discount: -108,000 AED
New price per unit: 1,092,000 AED
Initial payment (60%): 655,000 AED per unit
Total initial payment: 1,310,000 AED
Number of units: 2
Why this approach can be advantageous
Owning two apartments spreads the risk and can result in a higher rental yield than one large unit. In popular areas such as Dubai Marina or Palm Jumeirah, this can be particularly attractive due to the strong demand for rental properties.
Furthermore, a payment plan offers more flexibility. The portion of the budget not spent immediately can generate returns in other ways in the interim, while bank finance is only required at handover. In some cases, a smaller discount can therefore still lead to a better final outcome.
Edward Clarke is a seasoned property expert with extensive experience in international real estate investment, with a particular focus on Dubai’s fast-growing property market. Drawing on both personal investment experience and years of client advisory work, he helps investors make informed, realistic decisions when purchasing apartments, villas or off-plan developments in Dubai. With a pragmatic mindset, a sharp focus on returns and a strong commitment to transparency, Edward is a trusted point of contact for anyone considering a property investment in Dubai.
