Saturday, December 13, 2008

Dubai realty sector introduced to the 'Swap Shop' concept

The Dubai-based property broker, Smith & Ken has signed three deals this month, under a new concept of 'Swap Shop', wherein property buyers are free to exchange their properties.

The Chief Executive of Smith & Ken, Benjamin J Smith, who spoke to the media, said that when a person is unable to sell his property, he is offered the choice of swapping the property for another one, with a value lower than his current property, thereby offering the person a chance to own another property, while also holding back some extra cash.

Explaining the concept, he went on to say that a client of Smith & Ken, who owned a three bedroom shoreline sea-facing apartment worth Dh.4.5mn, with 2,184 square feet area, was actually in search of a garden home. The agency helped the client in locating a property at Palm Jumeirah, worth Dh.9mn four bedroom villa, with an area of 6500sq. ft., whose owner was looking to sell it.

The agency helped both owners to meet up and signed a deal between them. The advantage of such a deal, in this particular case, was that the person who was swapping his garden home property for the shoreline apartment, got an get hold of extra cash.

The agency charges the buyer and seller one percent of property value as commission. Speaking about the Dubai property market, Smith urged banks and lending institutions to raise the loan-to-value ratios once again, to the earlier 80 to 85 percent level, to reinvigorate sales.

Smith feels that even if prices are dropping in Dubai, it is still an attractive destination considering the investor's return and rental yield.

The value of residential properties in Dubai has climbed 5% during third quarter, when compared to second quarter of this year, while the average price for homes has risen by 7%.

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