Thursday, January 15, 2009

Properties in UAE being sold by owners at discounted rates

The homeowners are offering discounted prices to sell-off their properties, in a stumbling market, it has been learnt.

On further enquiries being made by media persons about several advertised prices, it was found that a prospective buyer could easily knock-off about 10 percent of the value announced for a double bedroom apartment in Dubai or Abu Dhabi.

For instance, a double bedroom apartment advertised in the Palm Jumeirah Shoreline Apartments for Dh.2.55mn was reduced to Dh.2.3mn, a reduction by 9.8 percent, without much bargaining.

Similarly, an apartment worth Dh.2.3m in Marina Quays was offered for Dh.2.1m with hardly any fuss.

These instance implies the extent to which the homeowners, particularly speculators, who had purchased off-plan properties years ago, who had no intention to occupy their homes, now, wants their purchase to be passed on before a further drop in prices, before their next payment due date.

"People are begging for you to give them any contribution," said Dr. Mohamed Guidom, CEO of Re/Max Absolute Realty, the Abu Dhabi-based estate agency, an affiliate of Re/Max International.

According to Dr. Guidom, the market is either filled with speculators who, after making huge profits, want to sell off their properties before the prices further go down, or the end-users are being unable to afford it now due to job-losses or other such threats.

Sellers are now offering commissions and transfer fee to pay brokers to fix a deal.

British buyers, who constitute majority of home owners in Dubai, are particularly keen on selling their properties to take advantage of the current favourable exchange rate, reveal property analysts.

According to Asteco, the Dubai-based property services company, a buyer with Dh.2.5mn worth money to spare, can easily pick-up a three bedroom medium-quality apartment in Jumeirah Lake towers, although villas may still not be affordable at this price.

The case has been similar with Abu Dhabi, too, wherein, the brokers were seen offering up to 15 percent discount on advertised prices. A double bedroom apartment in Al Muneera district (Al Raha beach) was instantly brought down to Dh.2mn from Dh.2.37mn, for instance.

Asteco, however, hopes that the mortgage market would improve in 2009. There will be an increase in money for lending, and developers would ease their payment plans. Banks, too will begin to recognize the fact that mortgages signify 'an excellent and safe use of their available funds'.

For 2009, Asteco predicts that sales activity would grow, while lending conditions would soften. Developers in Abu Dhabi and Dubai will also focus more on building affordable homes, rather than luxury homes, the supply of which is now severely lacking.


Anonymous said...

The only solution to this crisis is to issue a law that gives foreigners who own properties the right to get visa

sunil said...

that solution is already in place. the real problem this post is getting at is the over capacity in dubai much like china suffered when it so rapidly started building properties left and right.

there is simply more supply than demand. for every unit not sold and held, these builders are suffering from debt covenant violations on their financial statements. why? because they too need credit, to borrow money and build. selling at a big discount is much cheaper for them in the long term when compared to holding useless inventory that no one wants.

Real Estate Toronto lofts said...

usually lots of migrants always pop in and pop out ,now that dubai has lots of foreign investors coming in and out an increase number of companies like properties that is usually the big section of mostly the businessess in dubai